Currency Exchange Rates And Atms

[Genericnic]

I have a technical question concerning exchange rates and how they work with ATMs. As most of us know, currency markets are essentially open and working 24 hours a day and most of 7 days a week. That means the currency exchange rate is in constant flux. You can actually see it change by watching sites like The Wall Street Journal. http://online.wsj.com/mdc/public/page/mdc_currencies.html

So, my question is this. When you use your debit card to withdraw funds from an ATM, when is the exchange rate set that applies to the transaction? Do the rates update once a day, once an hour, continuously, etc.? And if it is once a day, when would the day start? Midnight IDC (BKK) time or midnight EST (New York) or maybe even 24:00 UTC?

Just one of those curious questions that aGoogle search didn't answer.

Thanks

David

[PCA]

all I know is that they update more frequently now changed from twice a day before. Not really sure now but there is a guy posting sometimes who seems to work or have worked for one of the big credit card companies. He should know that I think his id here is Swiss1960 or something like that.

[Pinot]

This site you will get the current ATM exchange rate at various banks. The numbers change every couple of hours so you know ahead of time exactly what the rate will be when use a particular bank's ATM. Sometimes the numbers are very different between the banks, often it's almost the same. Looking at the current rates between the banks, withdrawing 20,000 of $US you save $2 between the highest and the lowest.http://bankexchangerates.daytodaydata.net/

Edited May 26, 2013 by Pinot

[keeniau96]

A million baht is significant but the cashiers check hassle will be avoided by cash withdrawl. I always paid my builder in cash (several times it was more than a million), had him come to the bank with me and handed it over at the tellers counter.

[JimGant]

So, my question is this. When you use your debit card to withdraw funds from an ATM, when is the exchange rate set that applies to the transaction? Do the rates update once a day, once an hour, continuously, etc.? And if it is once a day, when would the day start? Midnight IDC (BKK) time or midnight EST (New York) or maybe even 24:00 UTC?

Once a day. If your Debit/ATM card is Visa/PLUS, this network projects the day's rate beginning at 12:01 AM New York time. And an ATM transaction is near-real time. So, if you hit the ATM machine at noon Thailand time, say on 24 May, you would have gotten the posted Visa/PLUS rate for 24 May, which was 29.853 baht to the USD. This rate is independent of any advertised bank rates (except Bank of Ayudhya, see below). And, it is only realized if your issuing bank adds no fees, and does not pass on the Visa/PLUS network fee of 1%. [bank of Ayudhya *does* set its own ATM rate, at least for MasterCard transactions, under the DCC concept. As far as I know, they're the only Thai bank doing this. See here: http://travel-lifestyle.com/articles/how-to-avoid-atm-fees-in-bangkok-thailand

MasterCard/Cirrus sets their daily rate approximately 12 hours later than Visa. So, a 24 May noon ATM pull with a MC Debit/ATM card would have gotten the MC advertised rate for 23 May, which was 29.738 (again, only if your card has no fees).

Visa's weekend fees are Monday's projected rate, backfilled into Saturday and Sunday. Thus, for 25, 26, and 27 May, the FX rate was 29.873

MC doesn't advertise a weekend rate, so I'm not sure what rate you'd get if you hit the ATM on the weekend (I experimented a few years ago with both Visa and MC ATM cards, but not on the weekend. And today I only have a Schwab Visa Debit/ATM card.)

If using the card in the POS credit card mode (swipe and sign), the transaction is not near-real time, and the rate you'll realize is delayed until processed. My experience has shown that a noon transaction with a Visa credit card will get the next day's rate -- while the same timing with a MC will get that day's rate (again, because MC lags behind Visa in posting/applying its daily rate).

The Visa and MC rate sites are below (and at least for Visa, there is a link for Europe issued cards). Rate transparency became a big issue after the credit card class action lawsuit in the US -- and as the MC site says, it is complying with EU laws by providing rates).

https://www.mastercard.com/global/currencyconversion/index.html

http://usa.visa.com/personal/using_visa/consumer_ex_rates_us.jsp

My experience has been that I get the advertised Visa or MC rate, both in ATM and POS modes, exactly as advertised. If this is not your experience, look elsewhere than the Visa and MC networks for any rate discrepancies -- usually fees from your issuing bank -- or DCC (dynamic currency conversion).

And, except for the Bank of Ayudhya, ATM machines displaying Visa/PLUS or MC/Cirrus logoes are dispensing baht at the advertised rates of these networks -- not the rates being displayed on bank-related websites.

[Genericnic]

Thanks for the detailed and informative answer Jim, especially the reference to the Schwab debt card. That is what I use as well and what I recommend to others.

David

[Jasun]

If using the card in the POS credit card mode (swipe and sign), the transaction is not near-real time, and the rate you'll realize is delayed until processed. My experience has shown that a noon transaction with a Visa credit card will get the next day's rate -- while the same timing with a MC will get that day's rate (again, because MC lags behind Visa in posting/applying its daily rate).

What about large stores such as Robinson's and Home Pro where you are given the option of paying in your home currency? Those rates are instant. Perhaps calculated on rate of the vendor's banking facilitator?

[JimGant]

What about large stores such as Robinson's and Home Pro where you are given the option of paying in your home currency? Those rates are instant.

This is dynamic currency conversion (DCC), And, yes, the rates are instant -- instant screw job. You'll pay 3-6% more in this situation over a network FX rate.

Large amount of info on DCC on this forum -- and on Google.

[Pib]

DCC bad, very bad for the card holder; DCC good, very good for the merchant/transaction processing bank.

Not untypical for DCC transactions (point of sale or an ATM withdrawal) to be veiled in vague/smoke-and-mirror wording which can imply (trick) the card holder into thinking it's the best way to accomplish the transaction. Well, yes it is the best way---for the merchant/bank.

Summary: do not accept DCC transactions, unless you like getting a lower exchange rate and making the merchant/bank a little richer at your expense.