Kasikorn Bank

[Gonsalviz]

I suppose you are using a foreign card.

When the ATM asks you if you want to accept the exchange rate they propose then press the NO button.

Then you will get your foreign banks exchange rate which is usually better.

Is this a question that's unique to Kasikorn ATMs? Bkk Bank ATMs never ask me this question.

You are correct that Bangkok Bank does not ask this question. Kasikorn does. I am not sure about other banks.

When did Kasikorn start this. In June last year (last time I made and ATM withdrawal) they did not.

[OriginalPoster]

I suppose you are using a foreign card.

When the ATM asks you if you want to accept the exchange rate they propose then press the NO button.

Then you will get your foreign banks exchange rate which is usually better.

Is this a question that's unique to Kasikorn ATMs? Bkk Bank ATMs never ask me this question.

You are correct that Bangkok Bank does not ask this question. Kasikorn does. I am not sure about other banks.

When did Kasikorn start this. In June last year (last time I made and ATM withdrawal) they did not.

It still doesn't if you are using a VISA ATM card, maybe it does with MasterCard.

[Swiss1960]

I think it is very rare that DCC is a good deal. I think the mark up of exchange rate is usually 4 to 5%.

I'd say it's never a good deal. It's sold as "you instantly get to see what it costs in your home currency." Period. Pretty expensive option.

And do you think the Visa/MC networks are going to give up their 1% foreign transaction fee (once called "foreign exchange fee" before the advent of DCC)? Heck no. And neither are the issuing banks going to waive their fees if you opt for the merchant's exchange rate under DCC. Why would any sensible cog in this chain of events say 'we'll take less profit, so that foreign merchants and their servicing banks can make more profit.' Duh. Plenty enough to go around -- at the consumer's expense.

Some half knowledge, which I'd like to correct:

First, yes in 95% of all DCC cases, it is bad for the customer, so only if your bank charges excess exchange rates (specially for "exotic" currencies), you should use DCC, that is why I said before, ask your bank about those costs in advance

BUT: VISA / MC do not charge foreign transaction fees, they charge Interchange fees, independant of the source / currency of the transaction. They charge Interchange fees even for transactions within a single country. Foreign Transaction fees are set up by the banks but not by VISA / MC. Some years ago, EU had to deal with foreign transaction fees within Europe (i.e. Euro transactions from Spain to Germany) and has clearly forbidden such fees as transactions in the same currency have to be dealt with as domestic.

And interchange works two ways: For cash advance at ATM, it is the ATM provider to receive the Interchange fees, for normal purchases (hotels, merchants), it is the issuing bank (cardholder bank) that receives the fees. That is the reason why most banks charge their card customers a cash advance fee to recover their Interchange fee costs on top of any possible exchange rate markup.

[OriginalPoster]

I think it is very rare that DCC is a good deal. I think the mark up of exchange rate is usually 4 to 5%.

I'd say it's never a good deal. It's sold as "you instantly get to see what it costs in your home currency." Period. Pretty expensive option.

And do you think the Visa/MC networks are going to give up their 1% foreign transaction fee (once called "foreign exchange fee" before the advent of DCC)? Heck no. And neither are the issuing banks going to waive their fees if you opt for the merchant's exchange rate under DCC. Why would any sensible cog in this chain of events say 'we'll take less profit, so that foreign merchants and their servicing banks can make more profit.' Duh. Plenty enough to go around -- at the consumer's expense.

Some half knowledge, which I'd like to correct:

First, yes in 95% of all DCC cases, it is bad for the customer, so only if your bank charges excess exchange rates (specially for "exotic" currencies), you should use DCC, that is why I said before, ask your bank about those costs in advance

BUT: VISA / MC do not charge foreign transaction fees, they charge Interchange fees, independant of the source / currency of the transaction. They charge Interchange fees even for transactions within a single country. Foreign Transaction fees are set up by the banks but not by VISA / MC. Some years ago, EU had to deal with foreign transaction fees within Europe (i.e. Euro transactions from Spain to Germany) and has clearly forbidden such fees as transactions in the same currency have to be dealt with as domestic.

And interchange works two ways: For cash advance at ATM, it is the ATM provider to receive the Interchange fees, for normal purchases (hotels, merchants), it is the issuing bank (cardholder bank) that receives the fees. That is the reason why most banks charge their card customers a cash advance fee to recover their Interchange fee costs on top of any possible exchange rate markup.

Can you cite an example of one of those 5% of all cases in which DCC works out to the customers advantage?

[garrfeild]

Most banks I have found are happy to accept your Thai drivers licence as proof of identity. Your licence has your passport number on it and they record this as well as photocopy the licence which they normally ask you to sign.

No hassle really and they are covering their toot as well as yours :jap:

That is untill you need a new passport, then your thai drivers license has your old passport number!

[JimGant]

First, yes in 95% of all DCC cases, it is bad for the customer, so only if your bank charges excess exchange rates (specially for "exotic" currencies), you should use DCC

Hmmmm. The 5% must be a Swiss thing....

It is a fact that your issuing bank is not obligated to use the Visa/MC exchange rate. So, yes, they could also charge a rate that, like DCC, builds in a 'spread' that adds to their bottom line. And if this 'spread' exceeds that of the DCC mafia, well, yes, go with DCC. But, for US types reading this, not to worry -- you'll know if you're getting hosed by your issuing bank. And the chance of that happening is practically nonexistent.

In the US, after a recent law suit, this would now be transparent, as this has to be completely reported as a separate line item on one's bank statement. As far as I know, US financial institutions no longer build in spreads -- the separate line item we now see reports the Visa/MC percent charge -- and, if applicable, the additional percent charge added by the issuing bank. But, if a spread vice percent charge existed, the law calls for its reporting.

BUT: VISA / MC do not charge foreign transaction fees, they charge Interchange fees, independant of the source / currency of the transaction....Foreign Transaction fees are set up by the banks but not by VISA / MC.

On my bank statement, the passed-on 1% Visa fee is reported as a "Foreign Trans Chg." My bank charges no other fees. That my bank chooses to pass on the Visa fee -- and call it by a name that indicates a fee set up by the bank, well, so much for semantics. The fee is what it is.

[theoldgit]

That is untill you need a new passport, then your thai drivers license has your old passport number!

Yes but as long has have got a number, probably in triplicate, then they are happy, it's a pretty pointless excercise.

[endure]

I suppose you are using a foreign card.

When the ATM asks you if you want to accept the exchange rate they propose then press the NO button.

Then you will get your foreign banks exchange rate which is usually better.

Is this a question that's unique to Kasikorn ATMs? Bkk Bank ATMs never ask me this question.

Kasikorn bank doesn't either.

As I said in a previous post they do now.

[endure]

It is a Mastercard credit card

[Swiss1960]

Hmmmm. The 5% must be a Swiss thing....

It is a fact that your issuing bank is not obligated to use the Visa/MC exchange rate. ... In the US, after a recent law suit, this would now be transparent, as this has to be completely reported as a separate line item on one's bank statement.

On my bank statement, the passed-on 1% Visa fee is reported as a "Foreign Trans Chg." My bank charges no other fees. That my bank chooses to pass on the Visa fee -- and call it by a name that indicates a fee set up by the bank, well, so much for semantics. The fee is what it is.

For the 5%: You must know that there is not just a single exchange rate used for a transaction, i.e. from Thailand to a Swiss account. When you do a cash advance, then the Thai bank will do it's settlement with VISA / MC using a pre-defined currency. This can be US$, GB£ or any other currency allowed / accepted by VISA / MC. Then VISA / MC will charge the issuing bank in another currency, this could be done in either Swiss Franc, GB£ or US$, depending on what was defined. The exchange rate charged to you is completely different from this settlement circuit and your issuing bank will use the rate best fit to make profit. Now, if you look at small countries with small volumes of foreign currency exchange rates, it might be beneficial for the local bank to offer DCC than to relate on the (not so good) exchange rate offered by VISA / MC for such small volumes. Don't forget, exchange rates heavily depend on the cost of the local banks to deal with various currencies. The 5% is what we (credit card issuer) know from experience (I work in this industry since 15 years).

Now for 1% VISA fee... it just does not exist. VISA interchange fees depend on various points:

- is it a domestic transaction or not (there might be local laws limiting the interchange fee, i.e. within the EU or Switzerland)

- what kind of purchase did you do, cash, retail, e-commerce, e-commerce with 3D secure, EMV or magstripe etc.

- what is the volume that your bank processes, the higher the better interchange fee...

Transparency is also requiered by law in Switzerland and I have internal knowledge of three banks.

- some banks take their internal exchange rate for high volume currencies (i.e. Euro or $), as they can buy that currency much cheaper in the market and make higher profits, but they use VISA / MC rates for all other transactions.

- some banks use the same foreign currency mark-up for all transactions, others differentiate and take from .9% for Euro to 2.5% for Thai Baht.

On my statements (three different banks) I see mark-up on the exchange rate for Euro or Thai Baht from 09% to 1.75% to 2.5%. As required by law, I do also see which rate from which date was used, and the banks inform me whether they take their own exchange rate or whether they take the rate from VISA / MC.

[OriginalPoster]

Hmmmm. The 5% must be a Swiss thing....

It is a fact that your issuing bank is not obligated to use the Visa/MC exchange rate. ... In the US, after a recent law suit, this would now be transparent, as this has to be completely reported as a separate line item on one's bank statement.

On my bank statement, the passed-on 1% Visa fee is reported as a "Foreign Trans Chg." My bank charges no other fees. That my bank chooses to pass on the Visa fee -- and call it by a name that indicates a fee set up by the bank, well, so much for semantics. The fee is what it is.

For the 5%: You must know that there is not just a single exchange rate used for a transaction, i.e. from Thailand to a Swiss account. When you do a cash advance, then the Thai bank will do it's settlement with VISA / MC using a pre-defined currency. This can be US$, GB£ or any other currency allowed / accepted by VISA / MC. Then VISA / MC will charge the issuing bank in another currency, this could be done in either Swiss Franc, GB£ or US$, depending on what was defined. The exchange rate charged to you is completely different from this settlement circuit and your issuing bank will use the rate best fit to make profit. Now, if you look at small countries with small volumes of foreign currency exchange rates, it might be beneficial for the local bank to offer DCC than to relate on the (not so good) exchange rate offered by VISA / MC for such small volumes. Don't forget, exchange rates heavily depend on the cost of the local banks to deal with various currencies. The 5% is what we (credit card issuer) know from experience (I work in this industry since 15 years).

Now for 1% VISA fee... it just does not exist. VISA interchange fees depend on various points:

- is it a domestic transaction or not (there might be local laws limiting the interchange fee, i.e. within the EU or Switzerland)

- what kind of purchase did you do, cash, retail, e-commerce, e-commerce with 3D secure, EMV or magstripe etc.

- what is the volume that your bank processes, the higher the better interchange fee...

Transparency is also requiered by law in Switzerland and I have internal knowledge of three banks.

- some banks take their internal exchange rate for high volume currencies (i.e. Euro or $), as they can buy that currency much cheaper in the market and make higher profits, but they use VISA / MC rates for all other transactions.

- some banks use the same foreign currency mark-up for all transactions, others differentiate and take from .9% for Euro to 2.5% for Thai Baht.

On my statements (three different banks) I see mark-up on the exchange rate for Euro or Thai Baht from 09% to 1.75% to 2.5%. As required by law, I do also see which rate from which date was used, and the banks inform me whether they take their own exchange rate or whether they take the rate from VISA / MC.

Not surpriset to hear that you've worked in the credit card industry for 15 years, your talent for obfuscation is testament to that. You have implied that 5% of the time the consumer comes out ahead with DCC, but can you cite a real-world example of that?

Edited November 14, 2011 by OriginalPoster

[garrfeild]

That is untill you need a new passport, then your thai drivers license has your old passport number!

Yes but as long has have got a number, probably in triplicate, then they are happy, it's a pretty pointless excercise.

Yes indeed, Though at first I thought how clever, tieing everything together with one number, then I needed a new passport. I only have to wait another 4 years and no doubt they will put the new passport number on the new license.

[puck2]

You repeated it already by chance:

Best way to minimise costs is DONT use the ATM, go inside the bank and ask them to do it manually and you wont pay the 150 baht fee either.

Instead of getting 10k baht do a bigger withdrawal 25k and reduce the amount of times you need to do it.

This is very interesting, if there is not another drawback like

- lower rate

- a higher fee by your card issuing bank instead of the 150 THB-fee

In your case my German bank would charge an additional fee higher than 150 THB, according to the terms of contract for my VISA-debit card.

If you don't mind, please inform me/us about

- the type of your card (debit or credit; issued in which country)

- the date of cashing the money

- the amount of withdrawal

- the exchange rate

- and potential fees

Many thanks in advance

[JimGant]

Now for 1% VISA fee... it just does not exist. VISA interchange fees depend on various points:

Interchange fees are a whole different enchilada. We're talking about foreign transaction fees -- and the 1% VISA fee certainly does exist in that context.

From the Visa website:

What is Visa’s fee structure for international transactions?

Visa Inc. does not assess any fees to cardholders or merchants. Visa applies International Service Assessment (ISA) fees ranging from 0.15 to 1 percent to its financial institution partners for their use of the global payment system.

The fees are paid by financial institutions on transactions that require the use of our global infrastructure. Since Visa does not assess any fees to cardholders or merchants, we have no involvement in financial institution pricing to cardholders or merchants. If financial institutions or merchants decide to assess a foreign transaction fee to their customers, they are required to provide details to their cardholders and consumers.

Lemme see. Visa charges your issuing bank an International Service Assessment -- usually the max advertised 1%. Now, if the issuing bank wants to pass this on, it becomes a Foreign Transaction Fee (and may be augmented by additional fees assessed by the issuing bank). Amazingly, Visa has the audacity to say, 'hey, we don't charge cardholders any fees.' (sniff, sniff). But, I guess, they're technically correct, as we know some financial institutions (like Capital One) who do eat the 1% Visa fee.

And check out THIS SITE and note all the 1%'s. Thus, the max 1% ISA advertised by Visa is the standard, not something less, like the 0.15% mentioned.

And swiss1960 said:

If the total add-on costs of your issuing bank exceed 2% of the withdrawal amount, then normally DCC will be cheaper

From everything I've seen -- at least with US banks -- foreign transaction fees are assessed whether or not the transaction is DCC or non-DCC. So, there would never be a case, based on fees, where DCC would be superior.

Perhaps this is not the case elsewhere. But even if it were, DCC costs more than the 2% saved in fees. So, again, bad deal.

That 5% swiss talks about must, then, be from banks who use their own exchange rate, which, by definition, would be below the DCC rate -- and way below the Visa/MC rate. Doubtful such banks exist in the West -- maybe Mongolia?

Anyway, DCC sucks -- at least for the 95% reading this.

[4evermaat]

Prior to heading to the atm or at the atm if you have mobile phone with internet, check out bankexchangerates.daytodaydata.net/default.aspx . select GBP (USD, EUR, AUD, etc) to THB. Select the TT rate for anything electronic (SWIFT, ATM, cash advance, etc). It tracks all of the major local banks, and will give you instant update ordered from best to worst rate. Very good when you pass by a group of varying ATMs, you know exactly which one to pull your money out of.

If you see one that is missing, you can fill out their feedback page and they'll re-add it. Sometimes the bank will change something on their rates page and the script cannot properly read the exchange data.

[JimGant]

Very good when you pass by a group of varying ATMs, you know exactly which one to pull your money out of.

Unless DCC is in play, the ATM owner is NOT setting the exchange rate. The effective rate you'll get is the network rate (for most of us, either Visa/PLUS or MC/Cirrus), less any fees your issuing financial institution charges, to include passing-on the Visa/MC 1% fee. So, you need to know the fee structure of your issuing bank. Most do pass on the 1% network fee, and many then add their own fees, both percentage and flat. See HERE for rates of many credit/debit/ATM cards.

Both the Visa and MC networks have websites where you can check rates. I logged some numbers this summer, using both Visa and MC credit -- and ATM -- cards. The numbers were nearly spot-on with those advertised on the websites (after adjusting for the 1% network fee passed-on by USAA Bank; but no adjustment needed for the no-fee Schwab Debit/ATM card.)

Interestingly, the numbers over several months showed the following averages (baht per USD):

TT Buying rate: 29.85 (from the BOT)

Visa/PLUS rate: 29.92

MC/Cirrus rate: 29.76

Neither Visa nor MC are as high as the Interbank Exchange Rate -- a rate both can certainly achieve, given their size and economies of scale. So, they've both built in a spread to add to their bottom line. But note the difference between Visa and MC -- MC's bottom line definitely is getting fat -- off the consumer, of course.

Looking at Visa website for Nov 15 (See HERE):

The rate for Nov 15 was 30.71. This is what I'd get with my no-fee Schwab card. The BOT TT rate was 30.65, as was BB, per their website.

Looking at the various TT rates for the various Thai banks will NOT tell you what you'll get from their ATM machines. What you'll get depends on all the fees your issuing bank attaches -- plus the network you're riding.

Unless -- the ATM owner snags you with his DCC option. Beware.

[4evermaat]

Very good when you pass by a group of varying ATMs, you know exactly which one to pull your money out of.

Unless DCC is in play, the ATM owner is NOT setting the exchange rate. The effective rate you'll get is the network rate (for most of us, either Visa/PLUS or MC/Cirrus), less any fees your issuing financial institution charges, to include passing-on the Visa/MC 1% fee. So, you need to know the fee structure of your issuing bank. Most do pass on the 1% network fee, and many then add their own fees, both percentage and flat. See HERE for rates of many credit/debit/ATM cards.

.........

Before I used AEON, I used that website for comparing rates. I'd refresh the page just before withdrawing from atm to have the latest rates. Then, after the withdrawal I double-checked against the withdraw amount in internet banking, and found the rates to be accurate down to the satang. Maybe this has changed?

I do a similar thing with AEON. I do a reverse calculation by dividing the THB amount withdrawn at atm by the amount shown in internet banking in USD to get the rate.

Edited November 16, 2011 by 4evermaat

[JimGant]

Then, after the withdrawal I double-checked against the withdraw amount in internet banking, and found the rates to be accurate down to the satang. Maybe this has changed?

The advertised TT rates do approximate what you'll get at the ATM machine -- if no issuing bank fees.

On average, if you have a Visa logoed card -- and it has no fees, including passed-on network fees -- you'll do better by several satang than the advertised TT rate (but, occasionally, trending could put you, briefly, right on the TT line). For MC, you'll do worse by several satang than the TT rate. If any of these cards have fees, or pass on network fees, they'll both do worse than the TT rate. Always.

Out of curiosity, what Debit/ATM card are you using? And what are the associated fees, if any?

[4evermaat]

....

Out of curiosity, what Debit/ATM card are you using? And what are the associated fees, if any?

BofA Military. Only the 1% int'l transaction fee, which is applied after the transaction has posted. No other fees other than after the 5th withdrawal of statement cycle using non BofA account, $1.00 ATM fee is charged. So you could max withdraw all of your money out and after fees are applied be in the negative slightly. Difficult to do at AEON, as they only issue 1,000 baht bills to foreign debit card withdrawals.

I do know that BofA regular fees are hefty: $5 + 3% foreign transaction fee per transaction or something like that. They are so full of themselves.

[phaethon]

Last week I forgot my wallet and used my UK Nationwide card to draw 10k from a K-bank ATM for the first time since charges were imposed.

I was informed of the 150THB fee at the ATM and the transaction was charged at 209.86GBP, so that's a VISA rate of 48.36THB/GBP. The rate published at http://www.exchange-rates.org was 48.43THB/GBP.

In addition Nationwide itemized two international charges: 4.19GBP (2% of 209.86) and 1.00GBP flat rate for fun.

So the banks, in total charged me 3.08 (150THB) + 4.19 (2%) + 1.00 (because we can) = 8.27GBP on 206.78GBP worth of THB, or 4%

Normally I pull money over via Halifax Swift to K-Bank 250,000 at a time for 9.50GBP charge or around 0.2% + whatever K-bank skim on the exchange rate on arrival.

[Mike45]

Thanks for the info about DCC. I think that's probably what it was. There was a screen which asked me if I was happy to accept the exchange rate and the only options were YES and NO. I needed the money at the time and didn't realise that answering NO would give me further options. For information I use a UK credit card which, at the moment, offers the cheapest means of drawing money from ATMs if you play the game right. I shall use it inside banks in future which will make it even cheaper!

Whenever I have seen DCC II was immediately aware of it because it offered me the amount in my home counties currency USD.

But what your saying is that it offered you an exchange rate. No hint of DCC and I would have been fooled also.

Can anyone confirm that if you select NO in the above example that you are offered something else instead of terminating your transaction?