Exchange rate error


#1

Hi,

So over this weekend I flew in to Armenia, one of the first things I did was to withdraw some 50,000AMD, to my surprise the rate I got was 587.12AMD per £1, now I understand about mid rates and xe.com was displaying interbank mid rate of 619.51(use as ref.). I understand that there is a markup at the weekend, when the markets open on Sunday and to the last hour in a bit, the rates on Revolut were still around 587.

After speaking to CS about this saying there was something wrong with rate, and there is also an issue generating chart in the rates function, all they kept saying is, interbank rates and you use morning star. Hey I work in a fx, I get it, you are market making etc… Now I logged in again and the rates shown are 619.21 as time of typing this. Went back to CS and was told no issue, looking at charts of some providers and that pricing did not jump today from 587 to 619.

So, was there an issue or you guys just had bad liquidity and you market making decided to be very risk adverse to detriment of users. Which one is it?


#2

Today it is doing the same, very bad rate again 589.5 historical rates also doesn’t work, and it seems to be stuck to this rate all day. Meanwhile I’m looking at pricing elsewhere at the bid 620. And if you want to use xe.com as example it is at 624 mid interbank rate. So if you guys are using Barclays as your provider I can guess why you get bad liquidity and you giving out these bad prices. However I feel your communication is very misleading.


#3

The mid interbank rate is simply the average between the bid and the offer.


#4

Thanks for your reply.

I completely understand how fx transactions work. I work in the industry.

I just question their marketing push which is a bit misleading, now it is clear that their liquidity provider does not provide them with a) deep liquidity on these pairs b) their spreads are quite wide.

So if what I read in the forums is right and their LP is Barclays, I can understand why they provide such bad rates. Those aren’t their strong products, there are better providers for these products(instruments) out there.

Because the “spike” you see on their exchange you would not normally see with say using multiple LPs, as you would use top of the book to get best rates, across providers. If what revolut was done in my industry, the FCA would be all over us, after clients complaint on bad fills. Even if you tell a client they are being filled at market rate.

I digressed a bit. But the point is there is a marketing push to say best rates and they don’t charges fees but they do, and also they don’t have better rates than other providers, what I like about it is the app and transparency to a point of all transactions.

And after talking to CS and reading these forums, it is clear that it is Revolut LP issue and also their own unclear and optimistic messaging. Either way I’ve stopped using them as my main card now, and will use other services where possible.


#5

Need to keep in mind that you’re dealing with institutional investors. Most people use Revolut as a retail banking product, rather than something used for FX trading.

In regards to their partners, I believe they use Barclays for storing customer funds in a segregated client account, whilst Currency Cloud is used their currency exchange product.

https://www.currencycloud.com

Hedge funds with their prime brokers probably get access to deeper liquidity and tight(er) spreads. Volume of trading by Revolut might have to do with it as well.


#6

Today is just happening the most strange thing - at least for me! So the exchange rate EUR - CLP is changing from 1 sec to the other, and the values go up and down, with a difference of 10 to 15 CLP.

Any clues on this behaviour? I’m used to see the rates changing a lot, but never saw such big differences from one value to the other.


#7

And after talking to CS and reading these forums, it is clear that it is Revolut LP issue and also their own unclear and optimistic messaging. Either way I’ve stopped using them as my main card now, and will use other services where possible.

Yes, “optimistic, as in “has landed in USA” means getting ready to do so.

And “becoming a European bank” means applying for it in Ukraine.

I was going to try it, but now I see there is a serious hype problem.