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  • ZeroFX vs Local Currency sub account

Hi,
So just a quick question. I've used a GBP subaccount while I was in London and just tried a ZeroFX transaction in CHF. While the exchange rate of converting money into the GPB subaccount was using a realtime exchange rate, i've noticed that the ZeroFX transaction is not as cheap as putting money in a subaccount. Should this be the case? It seems like Bunq is still putting some kind of transactional costs on the transaction when using ZeroFX but not when you convert money to as local currency subaccount.

    Sam changed the title to ZeroFX vs Local Currency sub account.

      @Sam-Turquoise-Wolf#274352 Local Currency exchange rates are from CurrencyCloud, card payment exchange rates are from Mastercard. Both should be close to mid-market rates, but they might differ a bit.

      As for bunq fees, in both cases you're paying a "network fee" of 0.5% when currencies are exchanged (both for Local Currency accounts and for card payments). Maybe at some point they will admit that this is a currency exchange fee, but so far they haven't ;)

        @Sam-Turquoise-Wolf#274352 and in addition to what Jakob said; you're looking up the wrong transaction for comparison. Your ZeroFX transaction with the mastercard FX rate is buying 3.08 CHF for 3.13 EUR; what you look up on the currency conversion is selling 3.08 CHF and buying 3.05 EUR.

          Hmm yeah that makes sense. But even then there is a positive difference in using local currencies. But really thanks for the info! Will just use the local currencies if possible and if that's not possible the zerofx helps a bit keeping the transaction costs down.


            @Jakob-Y#274362 We'd be happy to drop the 0.5% if you can live with us limiting all exchanges to operating hours of the currency market :). I don't have recent numbers but I recall the first 3 months after launching the average blended variance was 0.42%; not significantly deviating from 0.5%...

              @Ali#274366 Thanks Ali, appreciate the response a lot! I can live with the current fees, but calling them ZeroFX is a little bit my "pet peeve". From my perspective, not using a local currency account at all, when I visit my family outside the EU and pay with Mastercard:

              • Before BU18: Mastercard exchange rate converts my payment to Euro. That's it.
              • After BU18: Mastercard exchange rate converts my payment to Euro + I pay 0.5% network fee to bunq.

              At least, according to the pricing document at https://www.bunq.com/pricing which I admit I have probably read more times than any other PDF in my life (gotta give accurate advice on Together 😂). So is there a misunderstanding on my side? Appreciate any clarification, whether from you or in the pricing doc.

              And because I never had the chance so far to mention it when visiting you guys in DeLaMar, thanks for building bunq. Even though I heard in a podcast that you wouldn't have done it again because of all the regulations, I appreciate that you went through with it. No other bank offers an API that is so powerful and easy to work with.

                @Jakob-Y#274467 The difference is that CurrencyCloud conversions only take place during office hours. Outside of office hours exchange rates fluctuate (both up and down) and we need to offset that risk. On average this amounted to 0.42% which is right in line with the 0.5% we charge; therefore we charge no markup on FX (-> ZeroFX).

                Now if we change providers or CurrencyCloud starts doing realtime settlement we could reconsider, because then we no longer run the risk/pay for the fluctuations.

                If I compare our offering to the market then we are best in class regardless; Amex charges 3.5%, paypal and amazon around 3, and Revolut which is often hailed as free actually charges 1% in weekends/night times if I recall correctly (and the free plan only does so for the first 1k).

                Hope this helps!

                  4 days later

                  I totally get that with CurrencyCloud there might be a need for a blended uplift (network fee) in order to not make the pricing sheet even longer and more complex by adding time/day-of-week dependent fees.

                  What I don't understand is why it is necessary to charge the network fee on a standard MasterCard FX transaction. / If the CurrencyCloud rates are so cool why not push everything through CurrencyCloud instead of adding a fee on top of MasterCard rates?

                    2 months later
                    5 months later

                    Personally I do not mind paying 0,5% but thinking you pay 0 and discover you pay 0,5% feels like a hidden fee when the only way to know it is going to the table fees.

                    The zerofx make you think you pay no fees while you need to read carefully to discover you do not pay the « fx fees Â» that traditional bank surcharge. It’s might be me but I feel if you ask new users majority will think they convert 100 and get equivalent of 100 while they get 99,5 (which is still great)

                    Imo if a clarification would be good such as a small thing under transaction and explanation as Revolut does

                      @Bogz#281686 Hi Geoffery 👋 Thanks for contributing here! The 0,5% is a Network Fee. In order to maintain the complex network of branches, entities, and partnerships that allow us to offer ZeroFX, as well as cover the risk of currency fluctuation while FX markets are closed, this fee is necessary. While this ultimately saves users money, I do see how it could be construed as a 'hidden' fee, and a small explanation could go a long way to addressing this. Thanks a lot for your feedback, it's great to hear how our users interpret our services and communications! We will be sure to consider this moving forward 🚀

                        @emily-Blue-Wolverine#281695 thanks for the answer. Yes I don’t know for wise (I think it does) but Revolut displays it clearly and it’s nice.

                        Because for exemple if I want to get 3,71% interest rate in USD or GBP. I convert form € to £ and an other time £ to € it will decrease interest to 2,71 % + tax it make a quite big difference.

                          3 months later

                          @emily-Blue-Wolverine#281695
                          I recently came across this issue too. This very much looks like false advertising.
                          Fees, whether you call them 'network' fees or something else, remain fees. If you need them to cover the maintenance of a "complex network of branches, entities, and partnerships" that's fine by me.
                          But making statements such as "Traditional banks charge you extra when using your card for payments in foreign currencies—we don’t!" are simply incorrect and misleading (cf. https://www.bunq.com/features/zerofx).

                            It’s not like if it was bad beside Revolut outside weekend everyone charge for it. Just be transparent.

                              @sander2#286250 Hey Sander! Thanks for your suggestion! We will redirect it to the responsible department 🙌 In the meantime, you can read more about our Network Fee and where it applies here 🌈

                                15 days later

                                I had the same experience when opening a usd savings account thats promises 3.71% interest. I am a "casual" customer with little experience in banking. I wasnt aware of any network fees and lost money because of this. The 3.71% interest doesnt make up for normal interest, not in the short term anyway. You'll be better of putting your money in a 1 year deposit. Just a heads up for anyone thinking about opening a USD or GBP savings account.

                                  @New-Mauve-Woodchuck-897354373#287008 yes you need to withdraw 0,5% for convert to devise and 0,5% back if you plan to convert again in euro. Bunq is still does not displaying it properly. I don’t get why Bunq does not it’s easy to do, wise and Revolut are displaying it clearly.

                                    9 days later

                                    Now that we're out of the zero interest rate environment I really hope we can at least include some base-level of 1k or 2k EUR in "real" ZeroFX on mastercard transactions again one day...