Capital One fee test
Mar 8th, 2006, 07:23 AM
#21
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xyz123
>> £47 charge cleared on the Capital One statement as $82.52....dividing shows a rate of $1.755744681 <<
Visa exchange rate for March 8 is 1.736766. The Euro did not change from March 7 to March 8, so I'm guessing that the pound did not change much from March 5 to March 8. This 1.736766 that Visa charged your bank is almost exactly 1% LESS than the 1.7574 that cleared Captial One. If Capital One had backed out the 1% Visa charge, you would have seen a difference of 1 % LESS (1.72 or so on your C1). I'm guessing that the 1% more may be a rounding error on the relatively small purchase you made.
If you read the Q & A that is included on the Visa disclosure web site that I posted, you will see that Visa freezes the rate for the day and also freezes it on the weekend - this did not come from my wife.
Robespierre and xyz123.
I think where things are getting confused is that you are assuming that Visa uses the rate that is posted by ECB or oanda, and I am assuming that Visa uses a combination of it's own trading rates (remember, they are huge money changers) or other exchange rates, and the end result is posted on their site - which includes their 1% ISA. As I recall, they talk about how they establish the "base" rate on their site (I did not look at the site recently).
Stu Dudley
>> £47 charge cleared on the Capital One statement as $82.52....dividing shows a rate of $1.755744681 <<
Visa exchange rate for March 8 is 1.736766. The Euro did not change from March 7 to March 8, so I'm guessing that the pound did not change much from March 5 to March 8. This 1.736766 that Visa charged your bank is almost exactly 1% LESS than the 1.7574 that cleared Captial One. If Capital One had backed out the 1% Visa charge, you would have seen a difference of 1 % LESS (1.72 or so on your C1). I'm guessing that the 1% more may be a rounding error on the relatively small purchase you made.
If you read the Q & A that is included on the Visa disclosure web site that I posted, you will see that Visa freezes the rate for the day and also freezes it on the weekend - this did not come from my wife.
Robespierre and xyz123.
I think where things are getting confused is that you are assuming that Visa uses the rate that is posted by ECB or oanda, and I am assuming that Visa uses a combination of it's own trading rates (remember, they are huge money changers) or other exchange rates, and the end result is posted on their site - which includes their 1% ISA. As I recall, they talk about how they establish the "base" rate on their site (I did not look at the site recently).
Stu Dudley
Mar 8th, 2006, 07:30 AM
#22
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Stu..
I think you misread...the charge was made on Saturday and the rate did not drop to $1.73 and change until Tuesday all weekend the rate was hovering around $1.755..(the dollar must have had a good day yesterday as the rate dropped for the euro also)...all I can say is that when I was in London 2 weeks ago and compared the rates to the interbank rate as listed on xe, they were within a thousandth of a cent or two of each other while the rate on my USAA card, which is in general a good guy, was always about 1% higher (and as a matter of fact, USAA on its statement lists a 1% foreign currency charge that it says is included in the rate)....
There is no doubt in my mind that Capital One, at least as of now, is indeed sticking to the interbank rate and apparently not passing along the 1% fee that USAA is (and let's not mention what Citibank, Chase and Bank of America are doing)...
I think you misread...the charge was made on Saturday and the rate did not drop to $1.73 and change until Tuesday all weekend the rate was hovering around $1.755..(the dollar must have had a good day yesterday as the rate dropped for the euro also)...all I can say is that when I was in London 2 weeks ago and compared the rates to the interbank rate as listed on xe, they were within a thousandth of a cent or two of each other while the rate on my USAA card, which is in general a good guy, was always about 1% higher (and as a matter of fact, USAA on its statement lists a 1% foreign currency charge that it says is included in the rate)....
There is no doubt in my mind that Capital One, at least as of now, is indeed sticking to the interbank rate and apparently not passing along the 1% fee that USAA is (and let's not mention what Citibank, Chase and Bank of America are doing)...
Mar 8th, 2006, 08:30 AM
#23
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Looks like you are correct - the rates did drop almost exactly 1%:
From San Francisco Chronicle:
Thurs 1.7535
Fri 1.7541
Sat no trading - assume 1.7541
Mon 1.7491
Tues 1.7359
Since the interbank rate dropped 1% from Sat to Tuesday, then my assumption that the rates did NOT change at Visa, was wrong.
That would explain why Tuesday's Visa rate (including the 1% ISA) was 1% LOWER than your 1.75574 rate charged on Saturday. I thought that you had a Capital One card, but you have a USAA card. The evidence seems to suggest that if Visa's rate on Sat was around 1.755, then that's the rate you were charged and it only included the Visa 1% ISA.
Still have not resolved the claim by some that Capital One "backs out" the Visa 1% ISA.
Stu Dudley
From San Francisco Chronicle:
Thurs 1.7535
Fri 1.7541
Sat no trading - assume 1.7541
Mon 1.7491
Tues 1.7359
Since the interbank rate dropped 1% from Sat to Tuesday, then my assumption that the rates did NOT change at Visa, was wrong.
That would explain why Tuesday's Visa rate (including the 1% ISA) was 1% LOWER than your 1.75574 rate charged on Saturday. I thought that you had a Capital One card, but you have a USAA card. The evidence seems to suggest that if Visa's rate on Sat was around 1.755, then that's the rate you were charged and it only included the Visa 1% ISA.
Still have not resolved the claim by some that Capital One "backs out" the Visa 1% ISA.
Stu Dudley
Mar 8th, 2006, 09:17 AM
#24
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If Visa and ECB are posting the same rate, how can Visa be charging 1% more than the interbank rate?
Unless ECB's rate has Visa's ISA built into it, I don't see how they can be the same.
Unless ECB's rate has Visa's ISA built into it, I don't see how they can be the same.
Mar 8th, 2006, 09:23 AM
#25
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>>If Visa and ECB are posting the same rate, how can Visa be charging 1% more than the interbank rate?<<
Because Visa's "Base" rate (without the 1%) is 1% less than the interbank rate.
Stu Dudley
Because Visa's "Base" rate (without the 1%) is 1% less than the interbank rate.
Stu Dudley
Mar 8th, 2006, 09:50 AM
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Also, I would really not make too many assumptions about what they charge when the Pound/Dollar drops 1% in a matter of just 3 days - wait till the Pound & Dollar are a little more stable & see what happens then.
As I said, my wife works for Visa. She has managed a couple of system developement teams, and is now working on some major projects as a project manager. She's worked there for 20 years, all in a systems developement & support capacity. One of the most important tasks for any new system or changes to an old one is to make sure that there is full disclosure to the public about what and how Visa charges customers & merchants. They have been sued several times when disclosures were either missing or misleading. When I stated that the Visa rate quoted on their site includes the 1%, I kept this disclosure requirement in mind. If you review the site, there is a place to input the bank's markup, but nowhere to input Visa's 1% ISA. If they assumed that the user would include Visa's ISA in the Bank's markup, then this is really misleading and would result in lawsuits.
The purpose of this site is to see what your exchange rate would be if you buy something on a specific day. If your bank charges no mark-ups, then the intent of this function would be to display the exchange rate you will be charged on your CC statement. If the CC statement shows the rate as 1% higher, and the bank adds no mark-ups - then Visa would get sued again because they presented an exchange rate with some "hidden" fees - and believe me, Visa is vary careful about Visa getting accused of hiding fees.
I think we may be seeing things differently because you are looking at the Visa charge from an "external" viewpoint, and I am looking at them from an internal (Visa) perspective. It seems evident that for xyz's charge on March 5, Visa & Intebank rates were the same. You are assuming, I think, that Visa's rate does NOT include the 1 percent, because they could not possibly exchange at a rate better than the Interbank rate. If Capital One and xyz's CC "backs out" Visa's 1%, then the evidence would support your conclusion. However, I'm assuming that Visa exchanges money at a rate that is 1% less than the Interbank rate, and adds the 1 % to this exchange, and that's what they pass to all banks, and the bank does not "eat" these charges. The evidence (if my assumptions are correct) support my conclusion also.
We used to call this a "Mind F--K" when I worked in Systems Developement!!
Stu Dudley
As I said, my wife works for Visa. She has managed a couple of system developement teams, and is now working on some major projects as a project manager. She's worked there for 20 years, all in a systems developement & support capacity. One of the most important tasks for any new system or changes to an old one is to make sure that there is full disclosure to the public about what and how Visa charges customers & merchants. They have been sued several times when disclosures were either missing or misleading. When I stated that the Visa rate quoted on their site includes the 1%, I kept this disclosure requirement in mind. If you review the site, there is a place to input the bank's markup, but nowhere to input Visa's 1% ISA. If they assumed that the user would include Visa's ISA in the Bank's markup, then this is really misleading and would result in lawsuits.
The purpose of this site is to see what your exchange rate would be if you buy something on a specific day. If your bank charges no mark-ups, then the intent of this function would be to display the exchange rate you will be charged on your CC statement. If the CC statement shows the rate as 1% higher, and the bank adds no mark-ups - then Visa would get sued again because they presented an exchange rate with some "hidden" fees - and believe me, Visa is vary careful about Visa getting accused of hiding fees.
I think we may be seeing things differently because you are looking at the Visa charge from an "external" viewpoint, and I am looking at them from an internal (Visa) perspective. It seems evident that for xyz's charge on March 5, Visa & Intebank rates were the same. You are assuming, I think, that Visa's rate does NOT include the 1 percent, because they could not possibly exchange at a rate better than the Interbank rate. If Capital One and xyz's CC "backs out" Visa's 1%, then the evidence would support your conclusion. However, I'm assuming that Visa exchanges money at a rate that is 1% less than the Interbank rate, and adds the 1 % to this exchange, and that's what they pass to all banks, and the bank does not "eat" these charges. The evidence (if my assumptions are correct) support my conclusion also.
We used to call this a "Mind F--K" when I worked in Systems Developement!!
Stu Dudley
Mar 8th, 2006, 11:08 AM
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Stu...
Just to clarify...the Eurostar charge was done on Capital One (although I also have USAA and MBNA cards as well as a Citibank card for AA but I never use it outside the US)...
The charge was indeed made Saturday and yesterday morning (Tuesday) it was listed on my statement at the rate I stated.....obviously on Tuesday, the USD GBP rate fell almost 1%...my convesion would have been done either Sunday or Monday and it matched up pretty well with the listed interbank rate of $1.755....had I used USAA, I sm sure it would have been 1% higher...now whether the 1% fee is included in the interbank rate posted by xe, oanda and visa is what the question is...USAA admits they pass along a 1% charge and list it on their statement...Capital One on the other hand simply puts down the exchange rate used without breaking out what their part of the fee is...as the law suit visa and mastercard lost involved this disclosure as you noted, one would have to believe Capital One does not add any fee for currency exchange, something sort of borne out, as I have noted, by recent charges I made two weeks ago in London and comparing the rates on the Capital One card which was the predominant card I used with one or two charges I made on either a USAA card or an MBNA card which I use so as not to make too many charges on Capital One and subject the account to a fraud alert....
Hope I make myself clear...I still believe based on all the evidence I can garner that for whatever the reason, Capital One is the only bank I know of not passing along the visa 1% charge whatever it is called.
Just to clarify...the Eurostar charge was done on Capital One (although I also have USAA and MBNA cards as well as a Citibank card for AA but I never use it outside the US)...
The charge was indeed made Saturday and yesterday morning (Tuesday) it was listed on my statement at the rate I stated.....obviously on Tuesday, the USD GBP rate fell almost 1%...my convesion would have been done either Sunday or Monday and it matched up pretty well with the listed interbank rate of $1.755....had I used USAA, I sm sure it would have been 1% higher...now whether the 1% fee is included in the interbank rate posted by xe, oanda and visa is what the question is...USAA admits they pass along a 1% charge and list it on their statement...Capital One on the other hand simply puts down the exchange rate used without breaking out what their part of the fee is...as the law suit visa and mastercard lost involved this disclosure as you noted, one would have to believe Capital One does not add any fee for currency exchange, something sort of borne out, as I have noted, by recent charges I made two weeks ago in London and comparing the rates on the Capital One card which was the predominant card I used with one or two charges I made on either a USAA card or an MBNA card which I use so as not to make too many charges on Capital One and subject the account to a fraud alert....
Hope I make myself clear...I still believe based on all the evidence I can garner that for whatever the reason, Capital One is the only bank I know of not passing along the visa 1% charge whatever it is called.
Mar 8th, 2006, 11:09 AM
#28
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I have bank statements from last September (when I had to fall back on my checking account) that break out the 1% fee from the debit card purchase or withdrawal. I believe this separation became mandatory in April (or maybe June) of last year.
When I use the xe.com/ccc calculator with any transaction amount (and without including the other line item), it comes out as 0%.
Therefore: xe does not include any fees over and above the exchange rate in its computation.
I think this can only mean one thing: Visa can't be burying the ISA in the conversion (which I believe is illegal anyway, see above), and if you run an item through xe and it shows zero percent and there isn't a separate line item on your statement, you aren't paying the ISA - your bank/CU is absorbing it.
When I use the xe.com/ccc calculator with any transaction amount (and without including the other line item), it comes out as 0%.
Therefore: xe does not include any fees over and above the exchange rate in its computation.
I think this can only mean one thing: Visa can't be burying the ISA in the conversion (which I believe is illegal anyway, see above), and if you run an item through xe and it shows zero percent and there isn't a separate line item on your statement, you aren't paying the ISA - your bank/CU is absorbing it.
Mar 8th, 2006, 11:17 AM
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x1, the Visa site plainly states:
"The exact rate you are charged depends on when the transaction is posted to the Visa system <b>which may be later than the day on which you made a purchase</b>, depending on how promptly each merchant handles their Visa transactions."
So all your speculation about what rate was in effect when your transactions took place is moot.
http://www.corporate.visa.com/pd/consumer_ex_faq.jsp
"The exact rate you are charged depends on when the transaction is posted to the Visa system <b>which may be later than the day on which you made a purchase</b>, depending on how promptly each merchant handles their Visa transactions."
So all your speculation about what rate was in effect when your transactions took place is moot.
http://www.corporate.visa.com/pd/consumer_ex_faq.jsp
Mar 8th, 2006, 12:51 PM
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From Visa's consumer site
"Every day, except weekends, U.S. Memorial Day, Christmas Day and New Year's Day, Visa calculates the rate for the next day's transactions."
xyz
If your transaction was cleared by Visa on Sat, you would get the rate Visa calculated on Friday. If your transaction was cleared on Monday, it would also get Fridays rate. If your transaction was cleared on Tuesday, it would get Mondays rate. My guess is that your transaction was cleared by Visa either, Sat, Sun, or Mon (your statement should state the date) - all getting Fridays rate which "should" (this is a guestimation) be about 1.7541, The 1% drop in the pound occured on Tuesday, and Visa would first make this effective on Wednesday. Your statement said 1.75544 which is close enough to the Visa rate to say they were equal (rounding errors). We still disagree as to wheather the Visa 1.7541 rate (as posted on their site) includes the 1% ISA.
Visa Site, Cont:
"The Visa rate is selected from a range of rates available in wholesale currency markets or the government-mandated rate in effect one day prior to the applicable central processing date. Visa makes this rate available to issuing banks, which may adjust the rate in billing cardholders. The rate Visa makes available to issuing banks may vary from the rate Visa itself receives"
I intrepret this last sentence to mean that Visa can charge a higher OR lower rate than it receives itself. Visa does not necessarily follow any set trader's rate (interbank or other). I don't know if a "wholesale currency market" includes the exchange rate that xe, or oanda uses. I also would not assume that xe or oanda has access to Visa's "blended" rate - but they might if they "tap" into Visa's site daily and store history.
I have never doubted that Capital One can back out the Visa 1% if it chooses to do so.
If your transaction cleared prior to Tuesday, or even ON Tuesday (had to clear by then), and IF the conversion rate of 1.7541 on Visa's site on Fri-Mon includes the 1% (which is what I claim), then C1 passed the 1% to you. IF Visa's site does NOT include the 1%, and Visa added it on to the 1.7541 transaction it passed to Capital One, then Capital One is eating the 1%.
Gee - I need a drink
My wife is actually a "consultant" with Visa now - she retired as a fill time employee '99. She only works winters, and in the summer we travel. Her contract is up on Sat, otherwise I would have her ask this question on the internal Visa Q&A system.
Stu Dudley
"Every day, except weekends, U.S. Memorial Day, Christmas Day and New Year's Day, Visa calculates the rate for the next day's transactions."
xyz
If your transaction was cleared by Visa on Sat, you would get the rate Visa calculated on Friday. If your transaction was cleared on Monday, it would also get Fridays rate. If your transaction was cleared on Tuesday, it would get Mondays rate. My guess is that your transaction was cleared by Visa either, Sat, Sun, or Mon (your statement should state the date) - all getting Fridays rate which "should" (this is a guestimation) be about 1.7541, The 1% drop in the pound occured on Tuesday, and Visa would first make this effective on Wednesday. Your statement said 1.75544 which is close enough to the Visa rate to say they were equal (rounding errors). We still disagree as to wheather the Visa 1.7541 rate (as posted on their site) includes the 1% ISA.
Visa Site, Cont:
"The Visa rate is selected from a range of rates available in wholesale currency markets or the government-mandated rate in effect one day prior to the applicable central processing date. Visa makes this rate available to issuing banks, which may adjust the rate in billing cardholders. The rate Visa makes available to issuing banks may vary from the rate Visa itself receives"
I intrepret this last sentence to mean that Visa can charge a higher OR lower rate than it receives itself. Visa does not necessarily follow any set trader's rate (interbank or other). I don't know if a "wholesale currency market" includes the exchange rate that xe, or oanda uses. I also would not assume that xe or oanda has access to Visa's "blended" rate - but they might if they "tap" into Visa's site daily and store history.
I have never doubted that Capital One can back out the Visa 1% if it chooses to do so.
If your transaction cleared prior to Tuesday, or even ON Tuesday (had to clear by then), and IF the conversion rate of 1.7541 on Visa's site on Fri-Mon includes the 1% (which is what I claim), then C1 passed the 1% to you. IF Visa's site does NOT include the 1%, and Visa added it on to the 1.7541 transaction it passed to Capital One, then Capital One is eating the 1%.
Gee - I need a drink
My wife is actually a "consultant" with Visa now - she retired as a fill time employee '99. She only works winters, and in the summer we travel. Her contract is up on Sat, otherwise I would have her ask this question on the internal Visa Q&A system.
Stu Dudley
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