exchange rates

[soalbundy]

I use my ATM card to pick up money from my German account. Why does my German bank give me far better exchange rates than the Bangkok bank printed list of exchange rates. I assumed that I am buying Thai Baht but from the exchange rates from my German bank it looks like I am getting the selling rate, I'm not complaining but if they are making mistakes I will get the revised bill sooner or later, any ideas ?

[Pib]

Your German bank does not provide the exchange rate.  The exchange rate is provided by Visa/Mastercard (or whatever card logo you have) minus any foreign transaction fee your German card-issuing bank may apply.  Many banks charge a 1 to 3% foreign transaction fee that effectively lowers the exchange rate.

 

Mastercard Exchange Rate Page

https://www.mastercard.us/en-us/consumers/get-support/convert-currency.html

 

Visa  Europe Exchange Rate Page

https://www.visaeurope.com/making-payments/exchange-rates

 

Thai banks offer many different types of rates such as the rate, both Buying and Selling rate.  Such as Cash/Notes, Sight Bills, Traveler Cheques, TT (wire transfers), etc.   The rate this is closest to the Visa/Mastercard card rate is the TT Buying Rate....but to get the exact rate your card is giving you must use the Visa/Mastercard exchange rate and subtract any foreign transaction fee your card-issuing bank may apply.

 

And when using your card in a Thai bank ATM and a screen offers you a specific rate--DO NOT accept it as that is a Dynamic Currency Conversion (DCC) rate in disguise  and will be around 3% lower than the Visa/Mastercard rate.  DO NOT accept that rate and continue on without conversion so you get the Visa/Mastercard rate.

 

Don't use the Selling Rate  in your calculations as that is rate given when you are using your Thai baht (local currency) to buy other currency such as the Euro.   The Selling rate is higher than the Buying Rate but in this case this means you must fork out more Thai baht to buy 1 unit of another currency.   

 

When it comes to converting Euro to Baht in Thailand you want to look for the "highest" Buying Rate.   When you want to convert Baht to Euro in Thailand you want to look for the "lowest" Selling Rate.

 

[soalbundy]

30 minutes ago, Pib said:

Your German bank does not provide the exchange rate.  The exchange rate is provided by Visa/Mastercard (or whatever card logo you have) minus any foreign transaction fee your German card-issuing bank may apply.  Many banks charge a 1 to 3% foreign transaction fee that effectively lowers the exchange rate.

 

Mastercard Exchange Rate Page

https://www.mastercard.us/en-us/consumers/get-support/convert-currency.html

 

Visa  Europe Exchange Rate Page

https://www.visaeurope.com/making-payments/exchange-rates

 

Thai banks offer many different types of rates such as the rate, both Buying and Selling rate.  Such as Cash/Notes, Sight Bills, Traveler Cheques, TT (wire transfers), etc.   The rate this is closest to the Visa/Mastercard card rate is the TT Buying Rate....but to get the exact rate your card is giving you must use the Visa/Mastercard exchange rate and subtract any foreign transaction fee your card-issuing bank may apply.

 

And when using your card in a Thai bank ATM and a screen offers you a specific rate--DO NOT accept it as that is a Dynamic Currency Conversion (DCC) rate in disguise  and will be around 3% lower than the Visa/Mastercard rate.  DO NOT accept that rate and continue on without conversion so you get the Visa/Mastercard rate.

 

Don't use the Selling Rate  in your calculations as that is rate given when you are using your Thai baht (local currency) to buy other currency such as the Euro.   The Selling rate is higher than the Buying Rate but in this case this means you must fork out more Thai baht to buy 1 unit of another currency.   

 

When it comes to converting Euro to Baht in Thailand you want to look for the "highest" Buying Rate.   When you want to convert Baht to Euro in Thailand you want to look for the "lowest" Selling Rate.

 

The Bangkok bank offered 38.48 for 1 Euro, my German bank shows for that transaction 1 Euro=38,98 so if I pick up 20,000 Baht I have paid 513 Euro's + 4.5 Euros my bank charged. If the Bangkok bank rate had been used 1 Euro = 38,48 I would have paid 519.7 Euro's + 4.5 Euros bank charge. My card is Maestro. The ATM at Bangkok bank doesn't offer a specific rate of exchange which I have seen at other ATM's

[Pib]

57 minutes ago, soalbundy said:

The Bangkok bank offered 38.48 for 1 Euro, my German bank shows for that transaction 1 Euro=38,98 so if I pick up 20,000 Baht I have paid 513 Euro's + 4.5 Euros my bank charged. If the Bangkok bank rate had been used 1 Euro = 38,48 I would have paid 519.7 Euro's + 4.5 iEuros bank charge. My card is Maestro. The ATM at Bangkok bank doesn't offer a specific rate of exchange which I have seen at other ATM's

Since you didn't specify what Bangkok Bank rate you are referring to (i.e., Notes, Sight Bill, TT, etc.).  I'm going to assume the Notes rate is the 38.48 baht rate  you mention above since today's current Bangkok Bank Note rate is 38.45.   You should "not" use the Notes rate for an approximate comparison to what the Visa/Mastercard (Maestro) rate because the Notes Buying Rate is lowest of the rates....the TT Buying Rate (wire transfer) more closely approximate the card-logo exchange rate.    As mentioned in my earlier post, the closest rate is the TT Buying Rate which is usually plus or minus 0.5% (most days) of the Visa/Mastercard (Maestro) exchange. 

 

Now keep in mind the Visa/Mastercard rate lags the FX currency markets by approx 1 day because Visa/Mastercard only change theiir rates once a day, whereas, a bank may change its exchange rates numerous times during the day depending on how the FX markets are doing.  

 

So, if Maestro has set its rate for the next 24 hours, and lets say it's 39 baht/Euro, but during that 24 hour period the FX market take the rate up to say 39.5 baht/Euro the Thai bank will probably up their rate during the day also.  And probably the next business day the card-logo rate would go up to around 39.5 baht also.

 

To get as close of an apple-to apple comparison you need to ensure you are comparing the "same date" on the card-logo exchange page with the same day for the local bank rate.   And since local bank rates can change numerous times during the day that needs to be taken into account also.   If local bank rates changed say 3 times during the day, you probably should pick the opening/first rate of the day for the best apple-to-apple comparison since Visa/Mastercard has probably already set their rate for the next 24 hours.  Like today, I Bangkok Bank change it rates twice.  Sometimes I've seen them change 6 times a day.  And a couple years ago when the FX markets was have a very wild day due to some world financial even the SCB rates change 18 times during the day....around every 30 minutes.

 

If the ATM does not offer an exchange, then it's not attempting a DCC transaction on your....you will get the Maestro exchange rate minus any foreign transaction fee applied by your card-issuing bank.

 

Edited July 31, 2017 by Pib

[JamJar]

53 minutes ago, soalbundy said:

The Bangkok bank offered 38.48 for 1 Euro, my German bank shows for that transaction 1 Euro=38,98 so if I pick up 20,000 Baht I have paid 513 Euro's + 4.5 Euros my bank charged. If the Bangkok bank rate had been used 1 Euro = 38,48 I would have paid 519.7 Euro's + 4.5 Euros bank charge. My card is Maestro. The ATM at Bangkok bank doesn't offer a specific rate of exchange which I have seen at other ATM's

 

He already explained it to you as best he could.

Don't forget the up to 220 baht Thailand ATM withdrawal fee. That is another 5.6€

[KhunBENQ]

1 hour ago, soalbundy said:

The Bangkok bank offered 38.48 for 1 Euro

This is obviously the exchange rate for buying Euro banknotes at Bangkok Bank from update 2 from Friday July 27.

A cash to cash rate!

Are you really surprised that rates are worse than withdrawing Thai Baht from the ATM which does not involve handling of Euro cash?

 

Also you should not be surprised that banks don't offer the best rates for cash exchange.

At the best exchanges you would get about 38.8 today (July 31).

[Pib]

Yeap, that Bt220 fee needs to be cranked in also as it effectively lowers the exchange rate depending on how your bank displays the transaction.   Maestro has their "full" rate (excludes any fees charged by other) and then your card-issuing bank foreign transaction fee and the Thai bank fee (i.e., those other fees).   And banks can vary  in how their display the charge hitting your account...some banks will break any fees out separately....others will just lump all the fees in the cash amount you withdrew which can complicate a person's  math in trying to figure out exchange if the bank doesn't state the exchange rate.  And how it's displayed for "Pending" transaction amount may be different for the "Posted/Final" transaction amount.

Edited July 31, 2017 by Pib

[KhunBENQ]

1 hour ago, soalbundy said:

Euro=38,98 so if I pick up 20,000 Baht I have paid 513 Euro's

You actually pay 518.73 (20220 / 38.98) plus the 4.50 by your bank makes 523.23.

 

"Overall rate" is 20000/523.23 = 38.22.

Worse than any cash transaction (although theoretical for expats living here).

[12DrinkMore]

13 hours ago, Pib said:

Now keep in mind the Visa/Mastercard rate lags the FX currency markets by approx 1 day because Visa/Mastercard only change theiir rates once a day

 

I would be very surprised if the rates lagged the markets by 24 hours.

 

From Mastercard

 

Quote

Foreign exchange rates are specific to the date and time Mastercard processes the transaction which may be different from the transaction date. 

 

[fxe1200]

When I can, I change money with an importer in Thailand, who needs Euros, whilst I need Thai Baht. We change at the medium market rate,

 

http://www.xe.com/currencyconverter/convert/?Amount=1&From=EUR&To=THB

 

 at the time of our transfer. If the importer is absent, I use transferwise, which is still cheaper than any local exchange or any cash with any card.

[Pib]

Visa/Mastercard card normally only updates their exchange rate "once" every 24 hours....that why when you go to their websites you will not see different exchange rates that may have occurred during they day  like you see on Thai bank websites.   And sometimes just because the FX markets strengthened a currency say today, does not mean tomorrow/24 hours later Visa/Mastercard will adjust their rates up also as Visa/Mastercard may feel if was just a short term spike in FX rates caused by a brief financial event and FX rates will return to the lower lever within 24 hours.    

 

And usually, Visa/Mastercard rates for Saturday and Sunday will remain unchanged form Friday rates since Visa/Mastercard does not change rates on non-business days such as weekends.

 

Yes, the exchange rate you receive is based on the date that Visa/Mastercard "settles" the transaction, which is usually same day for debit card transactions and two or more business days for credit cards transactions.

[KhunBENQ]

I can confirm that for VISA the exchange rates were updated once daily at a specific time.

It was 11 AM Thai time if I remember right.

That's experience from my first two years 2011, 2012 when I was still using ATM (with no fees in Thailand or Germany, good old times).

 

Regarding the thread starter: there are still banks in Germany (and elsewhere) that do not charge own fees for ATM withdrawal abroad.

[Xobtsiwt]

Laundering?

[roger waters]

If you have a Thai bank account there is a very cheap online system, yesterday I changed a euro to 39.34 bhat without commissions, I use this system for a few years without problems, many people around the world use it, if you are interested contact me at this Address     [email protected]         it's all free I do not have any lucrative interest

[Get Real]

The easy answer is basically that the Thai bath is much overrated in Thailand. That is also what Bank of Thailand is aware of, and trying thier best to avoid a later crash. Unfortunately that is not possible, and as soon as they get their mindset right the smaller will the big fall be later.

The german bank is giving you more Bath for your money due to that they are looking for an honest value, that can relate to all other countries. It is not only your German bank that gives the Bath a lower status. That in common practice for most of the worlds currancies, that has not been connected to the Bath in any way before.

[maximillian]

I recommend www.transferwise.com to get money from Germany to a Thai bank.

Best exchange rate, lowest fee.

[soalbundy]

On 8/1/2017 at 8:49 PM, maximillian said:

I recommend www.transferwise.com to get money from Germany to a Thai bank.

Best exchange rate, lowest fee.

As far as I know they don't include Thailand in their service, I wanted to do a reverse, pay a debt in the UK from Thailand, no can do

[Pib]

1 hour ago, soalbundy said:

As far as I know they don't include Thailand in their service, I wanted to do a reverse, pay a debt in the UK from Thailand, no can do

transferwise does send money "to" Thailand, but you can't use them to send money "from" Thailand.  This is typical of money services like this because of Bank of Thailand regulations which control and limit the "outflow" of funds from Thailand.   Generally you must use Thai banks and maybe Western Union to send money out of Thailand.  

 

Thailand: Land of Smiles for  incoming money; Land of Frowns for outgoing money.

 

 

 

 

[maximillian]

12 hours ago, soalbundy said:

As far as I know they don't include Thailand in their service, I wanted to do a reverse, pay a debt in the UK from Thailand, no can do

Thanks for the information. But I have no need and no money to send out of Thailand.

Wish I had.