Go Back  FlyerTalk Forums > Miles&Points > Credit, Debit and Prepaid Card Programs > Credit Card Programs
Reload this Page >

Foreign exchange rates discussion [FOREX]--all cards

Foreign exchange rates discussion [FOREX]--all cards

Reply

Old Feb 24, 15, 3:29 pm
  #31  
 
Join Date: Jun 2014
Location: DFW
Programs: AA Lifetime Gold, Admirals Club, Global Entry
Posts: 999
Yes, this is really interesting. I guess the other variable, besides the rate, is the exact posting time.
FallenPlat is offline  
Reply With Quote
Old Feb 25, 15, 1:27 pm
  #32  
 
Join Date: Feb 2011
Posts: 186
AUD, NZD Datapoint

Just a few more datapoints completed a trip through Australia and New Zealand recently. And noticing some odd figures in the forex rates on my Chase CSP Visa - particualrly when it comes to payment credits/refunds...

In Melbourne, my hotel accidenitally charged me for parking, and as elite I was entitled to parking and they refunded the charge immediately.
Purchase:
Trans Date - 1/22
Post Date - 1/24
AUD Total - 40.80
Rate - .805147058
US Total - 32.85

Refund:
Trans Date - 1/22
Post Date - 1/24
AUD Total - 40.80
Rate - .788235294
US Total - 32.16
In New Zealand I purchased a bungie jump and they accidenitally charged me for the pre-paid picture rate, as I didn't want any photos they immediately issued a refund for the difference.
Purchase:
Trans Date - 1/30
Post Date - 1/31
NZD Total - 180
Rate - .729833333
US Total - 131.37

Refund:
Trans Date - 1/30
Post Date - 1/31
NZD Total - 20
Rate - .721500000
US Total - 14.43
I'm not ready to put on my tin foil hat yet, but it seems very odd to have a less favoritable to the consumer rate for refunds. Particuarly as the refunds all took place within minutes of the initial charge, and posted on the same day. To add to this, at no time did any other purchases during my 2 week travels ever reach the lower "refund" rate (AUD ranged from .82380000 to .794117647 and NZD ranged from .75000000 to .729833333) I'd love to hear some other people's experiences with returns...
peetahvw is offline  
Reply With Quote
Old Feb 25, 15, 6:07 pm
  #33  
 
Join Date: Dec 2014
Posts: 236
Originally Posted by peetahvw View Post
Just a few more datapoints completed a trip through Australia and New Zealand recently. And noticing some odd figures in the forex rates on my Chase CSP Visa - particualrly when it comes to payment credits/refunds...

In Melbourne, my hotel accidenitally charged me for parking, and as elite I was entitled to parking and they refunded the charge immediately.
Purchase:
Trans Date - 1/22
Post Date - 1/24
AUD Total - 40.80
Rate - .805147058
US Total - 32.85

Refund:
Trans Date - 1/22
Post Date - 1/24
AUD Total - 40.80
Rate - .788235294
US Total - 32.16
In New Zealand I purchased a bungie jump and they accidenitally charged me for the pre-paid picture rate, as I didn't want any photos they immediately issued a refund for the difference.
Purchase:
Trans Date - 1/30
Post Date - 1/31
NZD Total - 180
Rate - .729833333
US Total - 131.37

Refund:
Trans Date - 1/30
Post Date - 1/31
NZD Total - 20
Rate - .721500000
US Total - 14.43
I'm not ready to put on my tin foil hat yet, but it seems very odd to have a less favoritable to the consumer rate for refunds. Particuarly as the refunds all took place within minutes of the initial charge, and posted on the same day. To add to this, at no time did any other purchases during my 2 week travels ever reach the lower "refund" rate (AUD ranged from .82380000 to .794117647 and NZD ranged from .75000000 to .729833333) I'd love to hear some other people's experiences with returns...
What is happening is that for purchases, Visa is using the AUD to USD (or NZD to USD) buying rate, whereas for refunds it is using the selling rate for the same day. The selling rate will always be lower than the buying rate, as that's the built-in margin on foreign currency exchange.

You can check the rates yourself if you go here: http://usa.visa.com/personal/card-be...calculator.jsp
For buying rate, select My Card Is In USD and My Transaction Was In AUD, with a 0% bank fee, and for date enter the post date (as opposed to transaction date). It should return something very close to what's on your statement.

For the selling rate do the same except this time put My Card Is In AUD and My Transaction Was In USD. Then whatever number it spits out, the selling rate is 1/x and again this should be very close to the number on your statement.

I wasn't aware that that's how refunds in foreign currencies are treated. Conceptually it makes sense but yeah it sucks that you are worse off through no fault of your own!
shinjukuflyer is offline  
Reply With Quote
Old Feb 25, 15, 7:38 pm
  #34  
Original Poster
 
Join Date: Feb 2001
Programs: IHG Plat, Hilton Gold, Accor Gold, Marriott Silver
Posts: 3,957
Originally Posted by shinjukuflyer View Post
The selling rate will always be lower than the buying rate, as that's the built-in margin on foreign currency exchange.
Except that there is no such thing as "the" selling or buying rate. It's the rate Visa feels like charging. The rate for a refund could be the same, but Visa chooses how big a spread to put on it, without quantifying what that fee is.
Kremmen is offline  
Reply With Quote
Old Feb 25, 15, 10:34 pm
  #35  
 
Join Date: Dec 2014
Posts: 236
Originally Posted by Kremmen View Post
Except that there is no such thing as "the" selling or buying rate. It's the rate Visa feels like charging. The rate for a refund could be the same, but Visa chooses how big a spread to put on it, without quantifying what that fee is.
Why would any lender or forex trader buy and sell at the same rate? There will always be a spread. The question would then be whether Visa's spread is competitive or excessive.
shinjukuflyer is offline  
Reply With Quote
Old Feb 25, 15, 11:06 pm
  #36  
Original Poster
 
Join Date: Feb 2001
Programs: IHG Plat, Hilton Gold, Accor Gold, Marriott Silver
Posts: 3,957
Originally Posted by shinjukuflyer View Post
Why would any lender or forex trader buy and sell at the same rate? There will always be a spread.
There will always be a spread in a market, until there's an actual transaction. Then the buying and selling value are whatever that value is.

However, this is nothing to do with forex spread. Trading markets generally list major currency spreads of around 1-3 pips. (i.e. around .0001 to .0003) Nobody would even notice if it were that small. Visa's buy/sell rates as shown above differ by roughly .01, 100 times the usual forex market spread.

Plus, of course, in refund situations, they are controlling the transactions on both sides. You don't really think they exchange your money from one currency and then back again, do you? No, they just do nothing and skim some money off the top, before giving you back less.
Kremmen is offline  
Reply With Quote
Old Feb 25, 15, 11:22 pm
  #37  
 
Join Date: Dec 2014
Posts: 236
Originally Posted by Kremmen View Post
There will always be a spread in a market, until there's an actual transaction. Then the buying and selling value are whatever that value is.

However, this is nothing to do with forex spread. Trading markets generally list major currency spreads of around 1-3 pips. (i.e. around .0001 to .0003) Nobody would even notice if it were that small. Visa's buy/sell rates as shown above differ by roughly .01, 100 times the usual forex market spread.

Plus, of course, in refund situations, they are controlling the transactions on both sides. You don't really think they exchange your money from one currency and then back again, do you? No, they just do nothing and skim some money off the top, before giving you back less.
Yeah no of course, didn't mean to imply Visa is being charitable. I agree it is sneaky because you would expect a refund on the same date to use the same rate. They are acting like a currency shop here.
shinjukuflyer is offline  
Reply With Quote
Old Feb 26, 15, 8:19 pm
  #38  
 
Join Date: Feb 2011
Posts: 186
Originally Posted by Kremmen View Post
Plus, of course, in refund situations, they are controlling the transactions on both sides. You don't really think they exchange your money from one currency and then back again, do you? No, they just do nothing and skim some money off the top, before giving you back less.
Originally Posted by shinjukuflyer View Post
Yeah no of course, didn't mean to imply Visa is being charitable. I agree it is sneaky because you would expect a refund on the same date to use the same rate. They are acting like a currency shop here.
Ahh, makes sense, total naiveté on my behalf to assume that Visa was providing a flat exchange rate in both directions. Looking at the rates Visa has on their site it does look pretty close to what Chase passed through on the CSP:

$1 AUD = $0.805219 USD (Jan 24, 2015)
$0.7882792 USD = $1 AUD (Jan 24, 2015)

$1 NZD = $0.729827 USD (Jan 31, 2015)
$0.72137217 USD = $1 NZD (Jan 31, 2015)

Frustrating to the consumer, seems odd though that Visa gets to play with the spread like this (anyone else with an opinion if the spread essentially 1-2% is excessive or acceptable?)

Slightly related - as they're batching transactions for processing, seems like they should be able to reconcile purchases/refunds before doing the currency conversion, rather than being able to play the forex market with the float...
peetahvw is offline  
Reply With Quote
Old Mar 31, 15, 6:33 am
  #39  
 
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: IHG Spire Ambassador, SPG Gold, Ritz Carlton Gold, KrisFlyer Gold, AA Platinum
Posts: 662
Here are some examples on my CSP:

02/26 XINGBAKEKAFEIYOUXIANGO BEIJING 9.59
02/27 YUAN RENMINBI
60.00 X 0.159833333 (EXCHG RATE)

On Visaeurope:

* The rate shown applies to transactions processed by Visa Europe on 26 February 2015 with a currency conversion fee of 0.00%.

60.00 CHINA YUAN RENMINBI = 9.5889600000 UNITED STATES DOLLAR

* * * * *

1 CHINA YUAN RENMINBI = 0.1598160000 UNITED STATES DOLLAR

* The rate shown applies to transactions processed by Visa Europe on 27 February 2015 with a currency conversion fee of 0.00%.

60.00 CHINA YUAN RENMINBI = 9.5874000000 UNITED STATES DOLLAR

* * * * *

1 CHINA YUAN RENMINBI = 0.1597900000 UNITED STATES DOLLAR

On Visa.com:

* The rate shown is effective for transactions submitted to Visa on February 26, 2015, with a bank foreign transaction fee of 0%.

1 China Yuan Renminbi = 0.159816 United States Dollar

* The rate shown is effective for transactions submitted to Visa on February 27, 2015, with a bank foreign transaction fee of 0%.

1 China Yuan Renminbi = 0.159790 United States Dollar

Here we don't see the 1%, right? It's not exact, but definitely not 1% more.

Here is another one:

02/22 JINYUXILAIDENGJIUDIAN BEIJING 51.85
02/24 YUAN RENMINBI
324.20 X 0.159932140 (EXCHG RATE)

On Visaeurope:

* The rate shown applies to transactions processed by Visa Europe on 22 February 2015 with a currency conversion fee of 0.00%.

324.20 CHINA YUAN RENMINBI = 51.8496302000 UNITED STATES DOLLAR

* * * * *

1 CHINA YUAN RENMINBI = 0.1599310000 UNITED STATES DOLLAR

* The rate shown applies to transactions processed by Visa Europe on 24 February 2015 with a currency conversion fee of 0.00%.

324.20 CHINA YUAN RENMINBI = 51.8496302000 UNITED STATES DOLLAR

* * * * *

1 CHINA YUAN RENMINBI = 0.1599310000 UNITED STATES DOLLAR

On Visa.com:

* The rate shown is effective for transactions submitted to Visa on February 22, 2015, with a bank foreign transaction fee of 0%.

1 China Yuan Renminbi = 0.159931 United States Dollar

* The rate shown is effective for transactions submitted to Visa on February 24, 2015, with a bank foreign transaction fee of 0%.

1 China Yuan Renminbi = 0.159931 United States Dollar

Again, it's still not 1%, just the round up to the cent, right?

Certainly, if the base amount is considerably larger, say 100k CNY, we would see differences in the neighborhood of $s. But I really don't see the 1% people are talking about here.

Also, my information is just for CNY to USD on Visa.
zyxlsy is offline  
Reply With Quote
Old Apr 2, 15, 12:55 am
  #40  
 
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: IHG Spire Ambassador, SPG Gold, Ritz Carlton Gold, KrisFlyer Gold, AA Platinum
Posts: 662
Any thoughts, guy? I am also very eager to know whether Chase has been ripping me off, since I was thinking it wasn't and now I'm not sure anymore.

The data I collected still shows that Chase is doing fine, but it's just my interpretation to the data.
zyxlsy is offline  
Reply With Quote
Old May 4, 15, 12:54 pm
  #41  
 
Join Date: Jun 2012
Posts: 1,240
Originally Posted by AggieTraveler View Post
Visa did specify a date - on the processing date.
chase marriott visa, with email notifications on, you get an email immediately with the USD equivalent value.

Same store in Canada, within 10 minutes, there's a rate difference... so perhaps it's a "live" fluctuating rate

don't remember what was the % premium (over visa.com rate and xe.com rate)... need to go back and check. think it was <1%
paperwastage is offline  
Reply With Quote
Old May 4, 15, 7:41 pm
  #42  
Original Poster
 
Join Date: Feb 2001
Programs: IHG Plat, Hilton Gold, Accor Gold, Marriott Silver
Posts: 3,957
Originally Posted by paperwastage View Post
chase marriott visa, with email notifications on, you get an email immediately with the USD equivalent value.

Same store in Canada, within 10 minutes, there's a rate difference... so perhaps it's a "live" fluctuating rate
It certainly does fluctuate. It also doesn't matter, as it may not be the rate which the transaction posts at.
Kremmen is offline  
Reply With Quote
Old May 5, 15, 6:31 am
  #43  
 
Join Date: Jun 2012
Posts: 1,240
Originally Posted by Kremmen View Post
It certainly does fluctuate. It also doesn't matter, as it may not be the rate which the transaction posts at.
but if I get an email 10 seconds after I swipe, and the email contains the actual converted USD... then it should be a live rate?

(need to check if my final statement has the same USD as my email)
paperwastage is offline  
Reply With Quote
Old May 5, 15, 6:47 am
  #44  
Original Poster
 
Join Date: Feb 2001
Programs: IHG Plat, Hilton Gold, Accor Gold, Marriott Silver
Posts: 3,957
Originally Posted by paperwastage View Post
but if I get an email 10 seconds after I swipe, and the email contains the actual converted USD... then it should be a live rate?

(need to check if my final statement has the same USD as my email)
The email contains some live rate that may resemble the final rate in some way, but as it's not what you're being charged, it doesn't matter. The rate that you actually get will be on the posting date, which may or may not be the purchase date. So, especially if your purchase is late Friday and doesn't post until Monday, the rate could have moved significantly.
Kremmen is offline  
Reply With Quote
Old May 9, 15, 1:26 pm
  #45  
 
Join Date: Apr 2010
Posts: 267
Originally Posted by NYCRuss View Post
Thanks! This is very helpful.
Actually, for me the Starbucks in Korea experiment was very interesting, but as the results were all in the range of a penny, I don't know what to make of the results.
GarlicFlyer is offline  
Reply With Quote

Thread Tools
Search this Thread