Mbna used different currency

benboo_2

Hello,

In November we used our MBNA credit card in Botswana to pay for a number of everyday items such as supermarket bills etc. On each occason the card transaction receipts were signed off in the local currency, Botswana Pula (BWP), but we now find from our statement that for the vast majority of the transactions MBNA have debited the amount in South African Rand (ZAR) instead before coverting this to GBP.

This has resulted in two foreign exchange conversions firstly BWP to ZAR then ZAR to GBP which we believe has unfairly penalised us. Nowhere did any of the merchants involved state that they would debit us in ZAR, therefore are MBNA within their rights to do what they have done?

chattychappy

The first thing I would do is try and work out whether you have actually lost out. I believe the loading on MBNA is 2.75%. I believe the mastercard rate is published (google?) or look at the midrate on oanda.com which I find is a good guide. If you're only around 2.75% off, then you haven't lost out. Bear in mind that timing can affect the actual rate you get so you need to look at an average. It could be that despite the double converstion, you've only paid once, as it were.

Else I would ask them for an explanation and dispute if necessary. (If some local banking law forces them to do it this way then perhaps this is provided for in the T+Cs.)

NFH

What was the currency on the card receipts that you signed? Was it BWP or ZAR? If you signed in BWP and it shows a ZAR amount subsequently converted to GBP on your MBNA statement, then you can complain to MBNA that the amount was not authorised or signed for. Tell MBNA that you signed for BWP xxx.xx and you were charged ZAR yyy.yy.

Remember that MBNA add a fee of 3% for non-GBP transactions (of which 1% is a conversion fee by Visa).

ERICS_MUM

It might be that the Botswana Pula is not freely convertible on the foreign exchange market so no direct exchange rate exists from it to sterling.

If this is the case, more than likely it is fixed to the SA Rand, being the main African currency on the open market. So you might find that the rate between Botswana Pula and SA Rand is one for one and not actually treated as a foreign exchange transaction for the purposes of taking a chage/commission.

NFH

chattychappy wrote: »

I believe the loading on MBNA is 2.75%. If you're only around 2.75% off, then you haven't lost out.

MBNA used to charge 2.75% but like many others, have increased it to 2.99%.

Chattychappy is right in that it's the percentage fee that's the issue more than the double conversion. However, it could turn out that the BWP/ZAR rate is loaded with a margin by someone else in the chain though.

To explain why double conversion is irrelevant, when Visa or MasterCard get a GBP/BWP price from their bank, the bank calculates the quoted rate as GBP/BWP bid = GBP/USD bid ÷ BWP/USD offer. The spread (difference between bid and offer) is very tight on GBP/USD but quite wide on BWP/USD as it's not a very liquid currency pair. The same process occurs when calculating a BWP/ZAR rate, but the wide BWP/USD spread should only come into play once, even if your overall GBP/BWP rate is calculated through GBP/USD, USD/ZAR and BWP/ZAR minus 2.99%.

NFH

ERICS_MUM wrote: »

It might be that the Botswana Pula is not freely convertible on the foreign exchange market so no direct exchange rate exists from it to sterling.

If this is the case, more than likely it is fixed to the SA Rand, being the main African currency on the open market. So you might find that the rate between Botswana Pula and SA Rand is one for one and not actually treated as a foreign exchange transaction for the purposes of taking a chage/commission.

BWP/USD is freely convertible and is more liquid than most African currency pairs (except USD/ZAR). However, BWP is not pegged to ZAR, despite the BWP/ZAR being close to parity.