Money exchange is when people exchange one currency for another. Money exchange businesses have the legal right to handle currency. This should not be confused with Forex trading where the traders transact using currencies on online broker platforms.
How money exchange works?
The businesses that handle money exchange allow you to exchange currency from one country to another by using the buy and sell transactions. For instance, if you want to exchange the US dollar for Euros, you will need to take your US dollars to the bank or these institutions and buy the Euro from them.
The number of Euros you will buy will depend on the current international spot rate. Which are the values set by the banks that trade the currencies.
These money exchange businesses modify the rate a little to ensure they make a little profit from the transaction. Because such transactions are not done at the spot rate consumers may find it cheaper to incur credit card or ATM fees at foreign destinations.
Where to find money exchange platforms?
These businesses can be found in various locations. They are not hard to locate especially around airports and borderlines. This is especially because airports are the places where people but the currency they intend to use for their traveling destinations.
With banks offering ATM cards that can load multiple currencies more and more people are going cashless.
Currency conversion charges
This is the charge assessed by a merchant and is used to convert the transactions that involve foreign currency. This is usually calculated by the debit and credit card payment processor. The dynamic currency conversion calculates the point of sale when you make a withdrawal.
Most businesses incorporate this currency fee on the credit card statements and most people mistake this for a foreign transaction fee.
Key points to note
- A currency conversion fee is the charge imposed on credit and debit cards as one currency is converted to another. While the foreign transaction fee is the fee charged by the credit or debit card issuer on a similar transaction.
- The foreign transaction fee may sometimes be included with the currency conversion fee. This will depend on whether the issuer forwards that fee to you.
How Currency Conversion Fees Work?
When you make an ATM withdrawal that involves a foreign currency the amount requires to first be converted to your local currency so that the bank can process the transaction. The currency conversion fee is then charged for this process.
DCC (Dynamic Currency Conversion) then applies when the ATM offers you the option of getting charged in the foreign currency at the point of sale and you accept. This will come at a higher cost because the DDC fee will likely be higher than the one charged by your credit card issuer.
You should let the credit card handle the conversion as you won’t see the costs until you receive your statement.
The difference between Currency Conversion Fee, DCC, and Foreign Transaction Fee
The currency conversion fee is just one percent of the purchase price. It is issued by the credit card payment processor or any ATM issuer. It is normally presented to you as the foreign transaction fee.
The foreign transaction fee is, however, as per transaction just 2% to 3% of the purchase price offered by your credit or debit card provider. This fee can apply to purchases made online from an online vendor. The foreign transaction fee may sometimes include the conversion fee but does not include the DCC charges.
DCC allows you to figure out the costs of the purchases made right away but this will come at a higher cost.
Top 10 money exchange platforms in Newry
Citi, This company does more than just financial services. They handle everything from the micro to the macro. With over 200 years of operation under their belt. Citi’s mission is to serve as a trustworthy partner to its clients.
2. Lloyds Banking Group
Lloyds Banking Group offers the largest financial services. Established in 2009 the company has grown to be the leading provider of current accounts, savings, credit cards, personal loans, and mortgages.
3. NatWest Group
NatWest Group is constantly looking at how to drive positive changes to the communities. Their dynamic culture enables the customers to constantly improve their confidence and financial capabilities.
4. CME Group
CME group leads as the most diverse derivatives marketplace. Traders can trade options, futures, OTC, they empower the market assistants to manage risk and capture. The TriOptima offers optimization and reconciliation services.
6. Bank of Ireland
Bank of Ireland has evolved into a full-blown financial service provider. Different services are offered by the bank. You can deposit, get loans, life insurance, and many more services.
Santander diversified business serves approximately 5.2 million customers worldwide. Their goal is to simply be the bank of choice to the diversified consumers. They understand what it takes to be a leader and have one of the best employees in the financial sector.
8. Ulster Bank
Ulster Bank serves primarily in Northern Ireland and serves both retail and commercial clients. With their primary focus being putting customer’s interests at heart, you are assured of quality services. They have a network of over 240 branches throughout Ireland. All services are offered from loans, credit cards, insurance, and mortgages.
9. TSYS (Total System Services)
TSYS helps customers anticipate the future. They offer solutions and the necessary expertise. They intend to become the leading global payment solution service. They are providers of secure solutions to card owners.
10. Western Union
Western Union is the international bank which operates in UK and all around the world. By using the Western Union bank you can send up to £50,000 to bank accounts in over 50 countries, quickly, reliably and safely.
These companies will offer the best return on your currency exchange. You are guaranteed excellent rates, great customer service.