Thailand Live Friday 11 October 2024

[fanof3d]

Hope this question is in the right section.

In a better attempt to understand how local businesses use the currency exchange rate for foreign credit card purchases, my question is:

Do local Thai businesses use different currency exchange rates based on who their payment processor (bank) is or do they use the standard market rate by default.

Scenario. I want to make a purchase at a store. I ask them how many dollars and they say they have no idea. I ask them who they bank with.

They say Kasikorn. In reading their exchange rate policy:

I'm assuming that with a 1k or more purchase using a u.s. 'debit' card the exchange rate would be at $34.70. (current market rate tells me $35.16). Can someone confirm/deny this or add

to the understanding of this? Everyone's gung ho to swipe a card but I want to understand before hand at what rate I will be paying. Hope this makes sense.

Thanks!

[fanof3d]

looks to have been the 'buying' rate.

[Pattaya46]

AFAIK the local business's bank has nothing to do with the currency rate when you use a foreign credit card.

It's the card network (Visa, MasterCard,...) that manages this rate,

but the local bank (Kasikornbank here) and your foreign bank both can add some fee on the resulting amount.

BTW never pay in your foreign currency when in Thailand

Some places offer that you pay in $//£/... but the exchange rate is then very bad !

[mikebell]

I can't believe the inefficiency of Thai Banks in general but Kasikorn in particular. We are a Juristic Entity with 1.5 million in 2 K accounts - a deposit & a current. We wished to put a million into a deposit with a view to increasing our interest rate. K Bank obviously don't wish for this to happen & have placed so many obstacles in our way.

The last one was a meeting with 7 Committee members (2 Thai) all armed with ID & up-dated Minutes of AGM permission to change. Despite our Thai business member having set up the meeting & ascertained what documentation was required, the manager could not allow us to perform what we wished. We are now actively looking at banking options other than K.

[fanof3d]

Thanks @Pattay46.

Question then, what is the next best option? Getting a large amount of baht seems nearly impossible without paying fee's as well. I've tried to open a bank account but no one seems to want to be botherered with American accounts these days, which I understand but still presents some road blocks. The atm exchange rates and fees are even worse are even worse.

[fanof3d]

@mikebell,

I really don't understand why it's so difficult to maenuver around what should be a straightforward and simplistic process. I have been considering opeing up an import business but at the end of the day not really sure if all of the horse and pony shows are worth. Wish you luck.

[Pib]

When you make a "purchase" with a foreign credit/debit card the store may or may not utilize a "Dynamic Currency Conversion" (DCC)" transaction versus charging you in local currency (i.e., baht). It's purely up to the merchant if they prefer to attempt the DCC ripoff.

First, do not, repeat, do not accept a DCC transaction as the exchange rate is provided by the local bank the merchant uses versus the higher Visa/Mastercard exchange rate....and the DCC rate will be in the ball park of 3 to 4% lower than the Visa/Mastercard full exchange rate. This 3 to 4% lower exchange rate is pure additional profit for the merchant/merchant's local processing bank...by local processing bank I mean the bank the merchant has a contract with to process card transactions....like the name of a bank on the receipt which is usually Bangkok Bank, Kaiskorn, SCB, whatever bank the merchant is using to process the card transactions. It's purely up to the merchant if a DCC transaction is the default method for foreign cards...purely up to the merchant....it's not set by the local bank...it's purely up to the merchant. Merchants like DCC because it earns them 3 to 4% extra via the lower exchange rate.

Few Thai banks post their DCC exchange rate use for ATM or purchase transactions, but SCB does show their DCC rate "for foreign Credit Card purchases."

http://www.scb.co.th/scb_api/dccb_25.jsp

My experience in using my foreign credit/debit cards here in western Bangkok and the surrounding area is the great majority of merchants do not default to DCC but process the transaction in local currency/baht. But some companies like HomePro, Pizza Hut, etc., will default to using DCC and to avoid a DCC you must tell them when handing them your card "to charge Thai baht, not USD/GBP/EUR/etc)." So far in 7 years of during card transactions in Bangkok only two companies, a large tile company and a partiuclar hardware store, absolutely refused to charge in baht...they would only do a DCC transaction (remember they make 3 to 4% more this way); otherwise, you had to pay in cash or use a Thai card. Since these types of merchants are super greedy/trying to rip off folks using foreign cards I absolutely refuse to do business with them unless I absolutely have to. And it appears DCC transaction attempt is more common in area with a lot of tourists, foreign residents, like central Bangkok, Pattaya, Phuket, etc.

Anyway, when a DCC transaction occurs the receipt for signature will printout showing both the currency your card is issued under (i.e., USD, GBP, EUR) "and" local currency (i.e., baht)...if it shows both that is a DCC transaction. It it only shows local currency/baht then it's not a DCC transaction and you get the full Visa/Mastercard exchange rate minus any foreign transaction fee your card-issuing bank may apply.

And the specific DCC exchange rate will either be shown at the bottom of the receipt or at the top part of the receipt the check clerk may have torn off or folded behind the receipt or signature. Although it shows both currencies the charge hitting your account will be your card currency (i.e, USD, etc) which will be at the exchange rate set by the merchants bank (that lower rate)....the rate will vary slightly from Thai bank to Thai bank.

DCC transactions are done all over the world...merchants/local processing banks love to do them as it earns them more profit/fees. DCC transaction are legal but the Visa/Mastercard on their website try to be polite is explaining how the lower rate occurs and you really shouldn't do a DCC as it cost you more money which goes into the merchant's pocket. You are suppose to be notified by the merchant when a DCC transaction occurs but they usually use weasel/vague words on the receipt and also say the customer saw both amounts on the receipt for signature plus the exchange rate on the receipt....so therefore he was notified.

And the real kick in the butt is just because a transaction occurred via DCC and you were charge in your card's/home country currency, your card-issuing bank may still apply whatever "foreign transaction fee" they may apply against the card...1 to 3% is common....not because Visa/Mastercard or your card-issuing bank was involved in any money conversion (remember the local bank did the conversion already) but simply because it was a transaction accomplished in a foreign country. It varies among banks if they apply a foreign transaction fee for a DCC transaction....many do; some don't. So, you possibly ended up getting hit by both a 3 to 4% lower exchange rate and then to rub salt into the wound another 1 to 3% foreign transaction fee.

And remember if your card-issuing bank applies a foreign transaction fee that applies for charges in local currency (don't blame the merchant, local bank, Visa/Mastercard for that charge). All the cards I use have no foreign transaction fee and I always ensure the charge is in baht...never do a DCC transaction unless there is absolutely no other way.