Visa Exchange Rate
If you are one of the many millions around the world who uses VISAcredit cards, you might have realise that the exchange rate offered by VISA is usually below that rates offered by Bureau de Change.
This is yet another cash cow for VISA. Besides taking a cut of your transaction from your merchants (who passes on the cost to you), tourists around the world simply loves to swipe their VISA due to the convenience. Every swipe of the credit card brings the following profit to VISA:
1. 1-2% of your transaction fee (paid for by your merchant, who prices this into the cost of your product).
2. 1-2.5% of currency exchange fees.
Effectively, every swipe of your VISA credit card means you end up paying up to 4.5% more, which is the cost for your convenience. Worth it? Maybe and which is why VISA has reported higher year-on-year growth to their revenue. The share price for VISA continues to outperform expectations as VISA continues to grab market share from American Express, Mastercard, JCL and Switch.
There is yet another cash cow for VISA if tourist decides to use VISA to draw cash instead of swiping on credit. The margin for VISA? About 8% – which factors in transaction cost and exchange rate profit to VISA.
So now, you know the reason why these credit card companies are so willing to offer freebies to lure you to sign up.
Visa exchange rate is not as good as American Express and you are damn right how much money they earn.
Thanks for your comments.
This is why they are a fortune 500 company!
Hi,
Has anyone considered MasterCard? Its rates could be better than VISA or AMEX. Any thoughts?
Regards,
FG
This is co sistent. Visa exchange rate are not the best around.
Yes – but note – most vendors only accept visa in Asia. Thus, you might not have much choice when traveling overseas. Not getting the best exchange rate is better than bringing hordes of cash when traveling.