Morning from sunny Barbados where I am on holiday from the UK.
I usually hate travelling with caah and so I managed to get a Revolut card before I left the UK and I have been looking forward to using it on my trip.
Barbados has a currency that is pegged to the US dollar at an exchange rate of USD 1 = BBD 2. So my plan was to transfer money from my Revolut GBP account to the USD account and then use the card to pay directly in BBD which was listed as one of the supported currencies on the Revolut support page.
So far so good.
However, to my surprise when I have used the card for payment here in Barbados the Revolut transaction uses an exchange rate of USD 1 = BBD 1.9597. This is even worse than what I would get in a local bank or business where they transact at the rate of USD 1 = BBD 1.98.
So I am quite surprised by this and I am not sure how Revolut sources exchange rates for fixed currencies. If I go on a site like OANDA and I get the interbank rate for USD to BBD it gives the expected 1 to 2 rate. So is there some other source that Revolut uses?
And now I am not sure what the best strategy should be for the rest of my trip. Should I just directly take from my Revolut GBP account? Should I actually conduct transactions in USD rather than the local currency? (I know the usual advice is to transact in local currency but it seems in this case the local merchants will actually give me a better rate than what Revolut has)
And in general it would be nice to know how fixed rate currencies are handled if you transfer between the reference currency and the pegged currency. And should fixed currencies be subject to the same weekend “hedging” used for other currencies floating in the market (I was bitten by that this weekend when I saw I got a rate of USD 1 = BBD 1.94
I hope this subject is of interest to others and it would be nice to get some clarity because I’m really loving the Revolut product and I want to keep using it as this really has to be the future!