Visa v MasterCard FX spreads

[moa999]

A very interesting website
https://fx.sycuse.com/visa-mastercard/#/

That I can across on Whirlpool
https://forums.whirlpool.net.au/forum-replies.cfm?t=2620474

Whilst it's not greatly described basically the site has grabbed the published rates from Visa and MasterCard and used them to calculate a spread.

What I didn't know is that both publish rates for converting AUD to USD and separately USD to AUD and they are not the inverse of each other -- I.e there is an inbuilt margin. Visa is adjusted t-1 by default due to it using post date not transaction date.

The charts show multiple line
Light Blue/ Dark Blue for Visa
Red/Yellow for Mastercard

Takeaway is that MasterCard fee used to be negligible but since Nov 2016 they have been building in some margin, albeit it is still seems lower than Visa on most days

 

[oz_mark]

Supports what's been said before - they take a clip on the way through, with Visa having a bigger set of clippers.

As for the no fee thing, there is no bank fee, but they just take the scheme rate, and no-one has said the schemes don't have a fee...

 

[Nutcase]

Supports what's been said before - they take a clip on the way through, with Visa having a bigger set of clippers.

As for the no fee thing, there is no bank fee, but they just take the scheme rate, and no-one has said the schemes don't have a fee...

The card schemes set the FX rates and therefore have their own treasury strategy (and spread) sitting in behind that. They do this for several reasons (making money is the biggest one) however it goes a long way to explain why you get an AUD transaction (or pre-auth) immediately when transacting in a foreign currency. This also helps the issuers manage credit limits as the real time FX makes sure that AUD transaction does not exceed the limit.

The FX and cross border fees are at the discretion of card issuer and as we all know differ from one issuer to another.