Remove 0.5%/1% weekend markup for card purchases by delaying FX until Monday's WMR 4pm London fix

Nationwide’s Select, Clydesdale’s B, …

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even if you avoid using the credit card in the weekends there is still a potential annoying situation described by @anon9918960 in [this locked thread](https://community.revolut.com/t/weekend-exchange-rate-surcharge-clarification/4483/15):

With each transaction there is an authorisation (which arrives at the time of transaction) and a presentment (which arrives a few days later).

We give you the interbank rate at the time of the authorisation

[…]

From our experience the rate other challenger banks provide is the rate at the time of the presentment. This means the rate you see at the time at the transaction may not be the rate you end up exchanging the money at. The rate will be at the time of the presentment a couple days later.

this is a very uncontrollable annoyance which makes me reconsider using revolut at all, now that my local bank gives much better rate on weekends than revolut, and the rate is very close to rates found on google search and other online real time sources.

this deserves it’s own topic but I am not allowed to open a new topic…

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revolut does not allow me to edit my post, so I’d want to ask to my previous reply that if you pay friday but the other party makes the presentment in weekend, are you charged with the weekend rate?

No, the FX rate is applied at the time of authorisation, as the above quote states. Unlike conventional cards, the FX rate is not applied with Revolut at the later time of presentment.

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No. On the contrary, it makes it completely “controllable”. You initiate a transaction and that’s when you are charged at the then current rate. Yes, it means that the weekend markup applies, and yes, this is annoying. But it is more transparent than with normal cards because the exchange rate is known.

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This is very true. Some people argue that it is better to know a worse FX rate at the time of the transaction than a better FX rate a day or two later. This is the same argument applied by proponents of dynamic currency conversion. I would argue that it is always better to have a better rate a day or two later than a worse rate at the time of the transaction, whether we are talking about DCC or Revolut’s weekend markup.

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I agree that Revolut should implement the delay. But I guess a small markup is required for them to pay for the hedging. Otherwise I don’t know if they are allowed to wait until Monday in a prepaid scenario, even if chances are small that the exchange rate changes exceed whatever margin they add to the authorized amount.

But as allways, it can go both ways. You could get a better rate on Monday but it can also happen that the market opening gives you a worse exchange rate than what you would have, even taking the markup into account.
So it’s the question, do you like to have an exchange with a markup or a surprise, up or down, who knows.
I opt for the markup during the weekend with the option to do the exchange beforehand, if I plan spending money in a currency which I can hold.

But why? Realistically there is no significant risk involved for a private person. And statistically over the years, rate gains and losses should even out, so all you pay is the markup.

If you exchange beforehand, you have a similar risk plus additional costs to convert the unused money back to your home currency (or incur an even larger rate risk). And also it doesn’t work for currencies that you can’t hold.

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Absolutely spot-on. Revolut’s weekend markup or an even greater DCC markup will nearly always be more than the market movement before any delayed FX.

Using orders (auto-exchange) in both directions to get the best rates, holding a balance in the spending currency makes sense.

Unfortunately, the (low) markup of 0.5% is the difference between using Revolut or TransferWise on weekends.

I do most of my transactions on weekdays, but the really big spending goes on the weekend, because I have more time. Last Saturday I came home from vacation and spent a lot at the border. It was actually cheaper for me to opt for the merchant’s own DCC rates for the €>DKK conversion (close to 0% markup, a unique border trade thing) rather than pay in € on my Revolut card.

No markup should be included with Premium or Metal. Tbh it was the reason I purchased Premium, but it turned out I misunderstood the “No FX”-thing.

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There should be no markup on EUR/DKK anyway. This currency pair hardly moves, so there’s no need for Revolut to protect itself at the weekend. Revolut’s own history function shows that EUR/DKK has moved within a tiny range of only 22 basis points (0.22%) in the last 12 months. This same applies, to an even greater extent, with EUR/BGN.

But in any case, with EUR/DKK there’s no need to pay the markup because both currencies are balance currencies.

DKK is pegged to the Euro by law and therefore hardly fluctuates, you are right. The max fluctuation is set to 2.25%, which is a lot higher than I anticipated. In my experience, the fluctuation is limited to a few decimal points over a period of a year, and it more or less averages out over a period of perhaps a couple of years.

Ideally, all of these currency pairs should have no weekend markup.

/begin-rant/
In practice this also entails that Danish monetary policies remain identical to that set by the ECB, which means that we might as well just adopt the Euro in Denmark. Our current situation means that we have no say on Eurozone policies (because we do not use the Euro), we just have to blindly accept all regulation. It also means that we have a proprietary direct debit system with no competition (one provider) and a national debit card monopoly (though, to be fair, the debit card is cheap). Yay!
/end-rant/

by definition the weekend marked up rate is worse than Monday’s because it accounts for the risk. even if unknown, Monday’s will be better.

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Agreed. A bad known rate is nearly always worse than a good unknown rate.

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You have the option to exchange currency in the app
Before weekends

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except for the other ~100 currencies existing that you can’t hold in Revolut

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There is no issue for currencies in which one can hold a balance. The issue primarily concerns currencies in which one cannot hold a balance. Therefore what solution do you propose?

Forex markets aren’t open on weekends. Revolut adds 0.5%/1% to keep themselves safe because the price can both increase and decrease on Monday.
There is not much Revolut can do here…

they can do as everyone else, reserve the balance using a safe markup and wait until the markets are open again before actually settling.

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