Foreign ATM Withdrawal - What determines the exchange rate?
 

What determines the exchange rate when you withdraw cash from a foreign ATM?

The live market exchange rate at the moment of withdrawal? A daily average exchange rate? An exchange rate concocted by the bank that owns the ATM machine? An exchange concocted by your issuing bank? Is the exchange rate determined later on, after the transaction posts to your account?

I've contacted my issuing bank. None of the employees are able to give me an answer.

I believe mastercard/visa/amex sets the rates, not the issuing banks. the rates are normally not bad, if you have a card that doesn't charge you foreign exchange/transaction fee, you likely end up with better rates than banks retail exchange.

similar to what mingw is saying, I've gotten rather good rates whenever I've made an ATM withdrawal (such as at a 711 in Japan). I believe the network determines the rate as mingw suggests.

I can't answer for transactions using a debit or credit card or a cash advance from an ATM in a foreign country on a credit card.

The Network providers, i.e. Visa or MA sets the rate. As far as I know, the posting to your bank account is very close to real time. While I cannot know if it is instant, I know it would be no more than 30 min on the occasions I could check so soon after withdrawals. During our Transatlantic cruise last year, there were a few ports where I made withdrawals at banks near the pier just before returning to the ship. As soon as I got back to the ship, I went to internet cafe to check our account - the transaction was posted, in equivalent USD.

One thing I do notice, at least in Australia - the exchange rate tends to be LESS favorable, (or being jacked up), if the withdrawals are made right before weekend or banking holiday - i.e. the local banks which ATMs are used to make the withdrawal would be close for weekend or holidays shortly after the withdrawals. In 3 occasions, the rates were 1%+ higher than the historic rates reported on XE sites when I compared them.

Thank you all for your responses.

Is the Visa/Mastercard exchange rate set once a day, or is it tied to the live market rates and updated every minute?

I've found that the rate used on my Amex is very similarly to the market rate at the close of US trading on the day the purchase posts. (Some purchases take 1-2 days to post.) Plus, of course, the transaction fee.

I found this nice article on the topic:

http://www.portfolio.com/business-tr...seas-Bank-Fees