No, it’s a very plausible assumption on the basis that insurance to cover market risk is generally not commercially available. The most common way that a counterparty protects against market risk is by hedging, and there’s no evidence that Revolut does anything more than adds a markup of 0.5% or 1% depending on the currency pair.
There is an insurance for everything if you want. And none of the services Revolut uses are “generally available”.
Also, every business carrying significant FX risks does hedging. To assume a fintech startup handling billions of customer money just takes arbitrary risks is unreasonable. Especially as there is evidence that they do mitigate the risk: the 0.5/1%. There is no other justification for this, especially not what you describe: It does nothing to eliminate the big risks. And for everything else it’s unnecessary as wins/losses are in statistical balance.
It is quite possible that the market risk between the weekend transaction time and the time that liquidity restarts on Monday morning is borne by Revolut’s liquidity provider, which in turn also retains the 0.5%/1% weekend markup.
Hello, can u please help me, I’m travelling to Vietnam in 2 weeks and I don’t know how to use revolut properly, so they won’t charge me anything. I’ve read that VND is a very imbalanced currency. Also: which ATM can I use in vietnam to get my money in vnd? Is it okay to pay with Revolut in shops and restaurants in Vietnam??
I have a revolut mastercard card (couldn’t get revolut visa to poland). Any tips will be helpful please!! Thank you
Check this thread for ATMs in different countries: The ultimative free ATM withdrawal list for travelling (by country)
Be aware that this list is created and fed from the community, some ATMs may not be fully updated, or there might be others which are not included yet.
Revolut will apply a better exchange rate and no fees on the exchange between the currency in your account (may be more than one, e.g.: EUR and USD) and the currency you will pay using the card.
Note that during weekends, a markup applies.
More details on exchange apart from the Community itself: https://www.revolut.com/en-US/help/getting-started/exchanging-currencies/what-foreign-exchange-rate-will-i-get
EDIT: Additional links you could find useful to know more about how works
Completely agree. At the moment it is very opaque and almost underhanded.
I have a question, because I just did some conversions from EUR to GBP, and I did not notice any fee actually. I got a 0.8606 rate, and it seems to be the rate from Friday. Did I misunderstand something ?
Yeah, this fee is included in echange ratio.
That’s not what he asked. The price mentioned is ~ the closing price on Friday, so his observation is that there was no markup on the weekend.
This won’t happen. Revolut charges more on the weekends compared to two other cards I have; therefore it’s safe to assume that this is very much intentional to compensate for free transactions during the week. If in doubt, check the MasterCard rate offered by other banks. It’s ok for Revolut to earn money, but I’d be happy if they were a bit more open about it.
No, it doesn’t. Your other cards almost certainly don’t execute FX at weekends. The problem here is that Revolut executes FX at weekends, whereas nearly all other cards use the MasterCard rate on an FX business day.
The MasterCard rate applies only on FX business days. You’re comparing an FX rate when there’s no market rate with an FX rate when markets are open and trading.
The two banks I’m referring to (DKB, N26) both use the Visa / MasterCard rate (see here: https://www.mastercard.de/de-de/privatkunden/services-wissenswertes/services/waehrungsrechner.html) which is published on the MasterCard website. You’re wrong, this rate is published for weekend days too. It’s some time ago, but I’ve checked what happens if you take the rate for some weekend day and compare it to Revolut including markup, and it was a better rate. Thus, this is revenue for Revolut (because the two aforementioned banks don’t give presents to customers).
Therefore: Yes, Revolut is cheaper on 5 days out of 7, but more expensive on the remaining two. That’s a bit sad since it kind of ruins the benefit.
He didn’t say they were not published, he said they were most certainly not used.
Which doesn’t matter. It may very well be the case that all other banks will actually use the MasterCard rate during the next weekday (or even later). On average, this doesn’t change the result because the markets might rise or fall equally likely. However, by adding a 0.5% markup you’ll definitely on average pay 0.5% more and this 0.5% is revenue for Revolut.
You’ve missed the point. Revolut adds the 0.5%/1% markup only because it has to do so if it maintains its practice of FX at the time of a purchase transaction. If, for weekend transactions, Revolut drops its practice of FX at the time of a purchase, then the need to add 0.5%/1% falls away.
His point is that this is not a real “need” but just a convenient way to earn more. Therefore he assumes they will never change their practice:
If Revolut had implemented the weekend FX markup for revenue generation, then Revolut would charge an FX markup Monday to Friday as well, just as it does for business accounts (unless the business pays a £1k/€1k per month fee). The original reason for Revolut to add the 0.5%/1% weekend markup was not for revenue generation, but because it executes FX always at the time of a purchase transaction. What I do agree on is that Revolut is lazy to fix this because it generates additional revenue, albeit at the expense of attracting customers.
I’m not missing the point, you are. Of course they won’t pay more than all other banks just because of fun. They’ll exchange just as all other banks and pay just as much, i.e. the MasterCard rate. Since you pay more, you pay extra and that’s their revenue.
It’s really funny how people get caught up in marketing. Just as rule of thumb: If someone X charges you 0.5% more than somebody Y for the same net effect on your side, someone Y makes a revenue.
You have again missed the point. Revolut doesn’t use MasterCard’s or Visa’s rate (which are both once-per-day rates on business days only). Revolut instead uses a live rate from its liquidity provider.
Many Revolut customers are price-sensitive and are aware of other FX card providers (e.g. Halifax Clarity in the UK). Why would these price-sensitive customers be happy with a weekend markup when most tourist FX is executed at weekends?