-2) Currency Accounts and Currency Exchange:
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Currency Basics:
Introduction to how exchange rates work:
Currency account basics:
If you receive a payment in Euros to your via your personal EUR IBAN, then the monies received would remain in Euro.
There will be no currency exchange or conversion involved.
Exchange Rate Impact on Amount Received:
You can however, exchange (convert) the Euros received into the Pound Sterling.
If the pound strengthens, then the amount of GBP that you will receive after converting from EUR will decrease.
If the pound depreciates, then the amount of GBP that you will receive after converting from EUR will increase.
Worked examples:
£1:€1.1
£1:€1.2
€1:2:£1
€1.1:£1
If the GBP:EUR rate changes from its current 1:1.14 to 1:1.3, the pound will have strengthened.
For every £1 that you hold, you can exchange it for €1.30. To acquire £1, you will need to exchange €1.30.
Contrast this with:
If the GBP:EUR rate changes from a theoretical rate of 1:1.3 to 1:1.14, the pound will have weakened.
For every £1 that you hold, you can exchange it for €1.13, which is a decrease from the previous amount of €1.30. To acquire £1, you will now only need to exchange €1.13, as opposed to the previous amount of €1.30.
If you are exchanging Euros for the Pound Sterling, you will be buying Pound Sterling in exchange for Euros.
GBP:EUR and EUR:GBP are related to the same currency relationship. It doesn’t really matter which one you pick (I personally prefer GBP:EUR and USD:GBP, but that’s besides the point.) since you can use multiplication and division to calculate the amount.
Therefore if you’re converting to EUR from GBP, you would use multiplication using the GBP:EUR rate. Conversely, if you’re converting from EUR to GBP, you would use division using the GBP:EUR rate.
If you’re not too keen on the mathematics, I highly recommend using Revolut’s built-in converter .
Getting to Revolut’s Built-in Converter:
Demonstration of the Converter:
Yes.
If you strip away the ‘1:’ part and just imagine the number on the right of the colon (e.g. ‘1.3’ from £1:€13.), and use that to compare, you can see whether it has strengthened or weakened.
Original: 1.13 (£1:€1.13).
If the number is bigger than the previous number, then it’s strengthened, and if it’s smaller, than the base currency (GBP) has weakened.
1.30 is greater than 1.13, which means you get more than before. Therefore, strengthened.
If it drops to 1.05 from 1.13, then it means that you get less then before. Therefore, weakened.
Yep.
Foreign exchange markets (The global markets for currencies, essentially.) are notoriously complex and volatile.
Theoretically yes, it’s better to exchange from the Euro to the Pound if the pound is weak (You buy more pound sterling with every euro.), and vice versa (Buying Euros/Dollars if the pound is strong.), but it’s really hard to give advice as to how the pound sterling will perform today, tomorrow, next month, and the next year.
This thread might be of interest:
FX/Currencies General Discussion
Currency Accounts:
Activating/deactivating currencies:
What currency is used when spending with the debit card?
The item was priced in USD and I could have cover the entire amount with my account balance. Your reply was really useful as I was able to reactivate my US dollar account!
Does it mean that if I don’t want to pay in GBP for example, I just have to deactivate the GBP account? That would be wonderful as some merchants try to charge me in GBP when they “detect” the origin of my debit card.
As far as I am aware, Revolut, in relation to the debit card–currency account feature, works as follows:
Assuming that your base currency is GBP…
-A GBP transaction: GBP taken out of GBP currency account.A USD transaction, $0 balance in USD: USD amount taken out of GBP (base) currency account at the spot interbank FX rate (*Weekend markup, illiquid currencies markup.).A USD transaction, sufficient balance in USD: USD amount taken out of USD currency account.A USD transaction, insufficient balance in USD: USD amount taken out of GBP (base) currency account at the spot interbank FX rate (*Weekend markup, illiquid currencies markup.). At the current time, transactions cannot be split whereby the remaining balance is taken out of the USD currency account, and the remaining sum to be paid is taken from your base currency.A GBP transaction (base currency), insufficient balance in GBP: GBP amount taken out of the currency account with the highest balance (e.g. USD currency account if you have £0 in your base currency and the USD currency account has the highest balance.), and converted to GBP at the spot interbank FX rate.
I am unsure as to whether you can deactivate your base currency.
Merchants (with physical payment terminals.) should give you the option to pay in the currency originally charged.
When you are paying (either with contactless or chip-and-pin.), double-check to see whether they are applying the correct setting to the payments terminal.
The practice for charging in your base currency (Therefore merchant converting at an uncompetitive FX rate and therefore incurring significantly higher price for the consumer.) is called ‘direct currency conversion’ (Dynamic currency conversion - Wikipedia ).
There’s a big thread talking about the topic of DCC.
Option to disable GBP transactions to block dynamic currency conversion
Why is XYZ currency not available yet?
If Revolut does not have a wallets for the national currencies of the EEA countries (such as CZK, DKK, HUF, NOK, RON, SEK, etc.) to make economic use in these countries, Revolut will be just a “toy” suitable for tourists
It takes time for the operational and financial regulatory aspects to be set up for every single currency.
They don’t appear to be resting on their laurels, and have product expansions planned in their product timelines, both in terms of geographic locations that they will be servicing (US, Australia, Singapore and South Africa), and also in terms of new currencies supported for their currency account function.
Compliance with both the national (e.g. FCA, PRA.) and intergovernmental regulatory agencies (e.g. ESMA, …) takes time.
http://news.revolut.com/post/160838103397/polish-zloty-and-swiss-franc-have-landed
UK Non-domicile Tax Status: Are funds held in the UK?
IBANs are provided by the central bank of Lithuania whilst their money is held in a U.K. Account through Lloyds
Currency Exchange: -What is currency exchange?: _https://community.revolut.com/t/exchange-or-purchase-question/12930/2_ -Better to Exchange Currency Beforehand or Pay on Purchase?: _https://community.revolut.com/t/using-your-card-abroad/12633/4_ -Fee-free Currency Exchange quota per month?: _https://community.revolut.com/t/convert-foreign-currency-back-to-base-currency/12790/2_ -What is the weekend exchange rate mark-up?: _https://community.revolut.com/t/weekend-exchange-rate-surcharge-clarification/4483/9_ -Why the weekend FX rate mark-up exists: _https://community.revolut.com/t/exchange-rates/5515/12_ -Why is there a difference between the mid-market rate and the Revolut rate?: _https://community.revolut.com/t/exchange-rates/5515/18_
Currency Converter tool:
Deleting a currency pair:
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