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UK Home Office policy on exchange rates


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Some of you might recall the posts about the Home Office policy on charging visa fees in $ US.  See the attached. It explains the current policy, but I can't see anywhere that it explains why.  Nor can I see any rhyme or reason for some of the policy. Why do they pay in GBP (in cash) in Ukraine, or online in GBP in Cuba ?

HO_ERP_Policy.pdf

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Par for the course as far as the Home Office is concerned, it would appear. They never explained the rhyme or reason for introducing the dreaded "With-It Tower Passport Renewal Experience" (which has required 2 physical trips from whichever far-flung corner in LOS we live in to an office building with an exceedingly silly name somewhere in deepest darkest Bangkok at passport renewal time since 2014) either in the official announcement of this change:

https://www.gov.uk/government/news/changes-to-british-passport-services-in-thailand-2

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I see that they are still using this as a means of charging applicants a fee above that set by Parliament as despite it saying in Section 1 "The HOERP aims to set a fair rate for the applicant," it later says in Section2 that the rates used will be set at 4% above the Bloomberg rate!

 

In effect this means that applicants will be paying a visa application fee of 4% more than that set by Parliament. For example: the fee set by Parliament for a 6 month visit visa application is £89; but applicants will actually pay £92.56.

 

OK, £3.56 isn't that much, but for a settlement visa, where the fee set by Parliament is £1464, this adds £58.56 onto a fee which is already, by the Home Office's own admission, set way above the actual cost of processing!

 

When the Home Office first started charging for fees in USD in many countries I wrote to my MP. I explained that I could see the logic in charging in one currency, but could not understand why that currency was USD and not Sterling.

 

He replied that as I was not personally affected, he could do nothing and suggested I wrote to the then Immigration Minister; which I did.

 

Eventually I received the following reply:

 

"

MP Account Managers Team

Midlands, East of England &

International Responder Hub

c/o Lunar House

40 Wellesley Road

Croydon

CR9  2BY

 

 

 

 

 

 

Mr xxxxxxxxx

 

Email: xxxxxxx

 

 

 

 

 

 

                             

HO Reference: VCT/168765

TO Reference: 201749

 

 

7 March 2014

 

         

Dear xxxxxxx

 

Thank you for your email correspondence of 244 (sic) January to the Immigration Minister, about our online visa fees.  Your enquiry has been forwarded to Midlands, East of England and International responder hub, as we have responsibility for entry clearance matters. I am sorry for the delay in replying to your enquiry. 

 

UK Visas and Immigration (UKVI) is embarking on a programme of modernisation, which includes moving to an online application process where almost all customers around the world will apply and pay for their visas online. UKVI has already successfully launched online payment for visas in over 90 countries.

 

Customers in Thailand already apply for their visa online, and as from 16 December 2013, all applicants applying in Thailand have also been required to pay for their visa application online, using a MasterCard, Visa, Debit or pre-payment card. Additional online methods of payment are expected to become available in due course, such as other payment cards and e-wallets.

 

Online payment is mandatory for all customers and other methods of payment, including payment at the visa application centre, are no longer accepted. Online payment allows a more streamlined application process and is consistent with a wider global trend to online transactions and payments; it helps to cut costs in the management of the visas operation which in turn helps to keep visa fees down, and it is also a safer system for both customers and staff as it reduces the risk associated with handling large amounts of cash during the visa application process. 

 

Currently in Thailand it is only possible for customers to pay for their visa in US dollars although we expect further currency options to be made available as we progress.

 

 

We have considered all options carefully and chosen the most beneficial for all concerned.  The currency options are not driven by the UK Government but by global financial services markets, banking regulations and operational requirements within our global visa services network and our online payment service providers. Alternative currency measures may involve high-cost local arrangements with the banks and online payment providers in each country, which when added to the visa application fee would make the process substantially more expensive for all applicants. This would far outweigh the currency conversion fees suffered by applicants who do not own a payment card intended primarily for use in the required currency.

 

UKVI will not refund currency conversion fees or processing charges levied by card issuers.

 

Yours sincerely"

 

Basically, meaningless waffle; especially the part about the requirements of their online payment service; who are WorldPay.  

 

I contacted WorldPay, who assured me that they were happy to process payments in any currency their clients chose; especially a major currency such as Sterling.

 

I urge all those affected by this, especially those about to or already submitting settlement applications, to write to their MP demanding to know why they have to pay a fee of around 4% above that set by Parliament simply because UKVI charge in USD and not Sterling. 

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The only reason I can see for the Home Office opting for online charging in dollars, euros and whatever else, is that they actually want to be paid in these currencies.

 

If they charge in dollars, Worldpay collect dollars and it's dollars that are paid to the Home Office. It would make no sense for the Home Office to then exchange those monies into sterling at a cost to themselves.

 

If visa fees are set in pounds sterling (which is logical from a UK government), it would seem fair that anyone paying with a non-sterling credit card should be the ones who suffer any foreign exchange charges.

 

Yet they freely opt to receive online dollars and euros when it could just as easily be sterling, so all those paying with UK cards bear any foreign exchange costs, which is just madness when paying for a sterling denominated charge.

 

Ergo, back to my original point, unless they are stupid beyond belief and actually exchange all these foreign currency receipts back to sterling, they must want to top up their foreign currency reserves. I can see no other justification.   

 

   

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To reinforce 7x7's point, a recent settlement visa fee of 1464 GBP (paid in $ US) actually resulted in a charge to the sponsor's account of 1575 GBP. That is a massive difference in financial terms - 111 GBP. If the  UK sponsor of an applicant in Cuba pays 1464 GBP (because he can pay  online in GBP), then why should the UK sponsor of an applicant in Thailand pay 1575 GBP (because he has no choice but to pay online in $ US) ?

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  • 1 month later...
7 hours ago, Tony M said:

Where applications are processed online we were only able to charge in a single currency in any given country and in Thailand this is US Dollars. This decision is based on what is operationally possible, in terms of the online payment system and local banking arrangements and the most expedient currency for both the payer and payee. 

 

This above is the bit for me that's just pure garbage. Every part of that statement is just nonsense.

 

All that complicated crap about their exchange rate policy is just so annoying. Consular rates, commercial rates, Bloomberg rates, FCO rates, FT rates: for crying out loud.

 

I've got a solution - charge in pounds sterling - the exchange rate difference will be precisely zero.     

 

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