Display FX rates consistently using market convention


#1

Where a rate for a currency pair is quoted as CCY1/CCY2 = R, then R represents the number of units of CCY2 that one unit of CCY1 is worth. In other words:

CCY1 amount x R = CCY2 amount
or
CCY2 amount ÷ R = CCY1 amount (when trading a CCY2 amount)

There is a market convention that determines for any currency pair which currency is CCY1 and CCY2, based on the value of each currency and a hierarchy of exceptions. For example, a rate between CHF and JPY will be quoted as CHF/JPY because one Swiss Franc is worth more than one Japanese Yen. The less valuable currency is typically CCY2 (giving a rate higher than 1) except for the currencies listed below, which are always CCY1. If any of these exception currencies are quoted against each other, then the currency appearing first in this list will be CCY1.

EUR, GBP, AUD, NZD, FJD, TOP, WST, PGK, BWP, SBD, USD

Examples of FX rates displayed in market convention can be seen at www.truefx.com. These rates are real-time wholesale interbank rates, which prove that Revolut genuinely offers wholesale interbank rates.

Revolut doesn’t always follow market convention. Instead Revolut uses the sold currency always as CCY1 and the bought currency always as CCY2.

For example, whereas market convention is GBP/USD, Revolut uses USD/GBP when exchanging from USD to GBP and uses GBP/USD when exchanging from GBP to USD. Alternating in this way makes it difficult to compare the rate against other sources and also makes the rate difficult to understand, as it’s not in the format that one is used to seeing. It is confusing for the format of the rate to be alternated depending on the direction of the trade. I therefore suggest that Revolut should instead consistently use market convention, as described above.

Although the UK retail market prefers non-standard inverted GBP/EUR rates, Revolut is a global product, not aimed solely at UK consumers, and therefore I suggest global market convention EUR/GBP should be used, which will be more familiar to anyone outside the UK as well as being used by the European Central Bank. Using market convention EUR/GBP also makes it easier to compare Revolut’s rates with wholesale market sources, revealing that Revolut’s rates really are bang-on market.


#2

Wouldn’t the best option be just to show both CCY1 / CCY2 and CCY2 / CCY1 (the inverse)? This is very easy to do in an app, and would keep everyone happy. The market convention you cite is not exactly consistent, since it relies on conventions that privilege certain currencies over others in certain cases.


#3

Wholesale market convention is fully consistent. The only time is varies is where some countries’ retail markets prefer their currency to be always CCY1 (e.g. UK prefers GBP), and some countries’ retail markets prefer their currency to be always CCY2 (e.g. Switzerland prefers CHF). But these variations only affect retail markets. Global market convention for wholesale markets (and Revolut’s rates are wholesale) is consistent.


#4

Hi @NFH & @Geoffrey,

Thank you both of you for your ideas.
We’ll take them into serious consideration. I’ll update you once I have more information

Thank you,

Andreas


#5

Considering that Revolut is not a business app (yet), displaying the currencies as they are exchanged makes more sense to me.

GBPUSD - converting GBP to USD
USDGBP - converting USD to GBP

(I wasn’t aware that the convention does not follow that logic, considering that there is always 2 rates depending which way you convert)


#6

This makes no sense, and is contrary to other retail FX providers. For example show us a bureau de change or bank that inverts the bid or offer depending on the direction of the transaction. You won’t find one anywhere in the world. Bureaux de change display rates just like www.truefx.com albeit with much wider spreads.

The only question regarding retail vs wholesale is EUR/GBP vs GBP/EUR, and I’ve already addressed that one above.