Recently, I noticed my bank is applying a currency conversion fee when I am paying in some online sites. The scenario is

I got to somesite.com and order a product (food/service/devilevry/whatever). The site states that it will cost XXX BGN (Bulgarian levs), my card gets charged XXX BGN. My backing account is in BGN and the card is in BGN. According to my bank statement, however I also recieve YYY BGN currency exchange fee. When I ask my bank about that the answer is as follows:

The backing virtual POS on these sites resides in another country. Although you get charged in BGN, the actual transaction is executed in EUR, which requires us to do a currency conversion, hence the fee. This is mandated by the payment system set in place (VISA or Mastercard).

The part I do not understand is: if the actual transaction is executed in EUR, why do I not see a ZZZ EUR charge on my card.

I proceeded and contacted a few of these sites and asked in what currency is their backing account and in what currency they receive the payment. The ones that answered all said, that their backing account is in BGN and they receive the transactions in BGN.

At this point I am asking myself is my bank trying to scam me, or is there more to these payments?

  • I wrote an entire article about this issue. Traditional banks give you an unfair forex rate, compared to what they get for exchanging the EUR for the Bulgarian Levs. You should use a transparent service like TransferWise or sign up with a challenger bank like Revolut. Apr 2 '20 at 19:53
  • It's not about the unfair rate, I'm aware of that. My question is more aimed at that my bank is telling me "MasterCard is asking us for EUR, so we give them EUR" while I see BGN in my statements and the retailers are telling me they receive BGN. One such case is top-ups in Revolut. Apr 2 '20 at 20:01

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