Imposed unfavourable exchange conditions and additional fees. Sometimes a refusal to withdraw funds, even though the money is available in your account. Are these just myths regarding ATM withdrawals and that there is nothing to fear at all? In reality, the exchange rates usually turn out to be more favourable than in land-based exchange offices, and transactions are not subject to commission. What is the truth about cash withdrawals made from ATMs abroad? The extreme scenarios are not far-fetched. Much depends on the card type and the machine operator. Amounts and frequency of withdrawals can also be important.
Do not use your PLN card for withdrawals in foreign currencies
You are going abroad where the currency is different from the one you use every day. You have run out of time to change money or get a multi-currency card, or you have made the conscious decision that you can do without at the moment. After all, you can pay at the hotel, shop, restaurant, airport or car rental with the same card you use every day. And if necessary, you can use it to go to the nearest ATM to withdraw, for example, euros, dollars, pounds, francs, Czech koruna, forints, Danish krone, Swedish krona, Norwegian krone and so on.
Usually, you will not have any problems with subsequent transactions. The reckoning, almost to the point of outrage, may come a little later when you look at the details of these transactions in your bank account.
"Why is this? Because when you withdraw money from an ATM abroad, for example, there is a currency conversion imposed by the banks and ATM operators, which applies to both the exchange rate and the commission. Even if they seem small at first glance, e.g. 1-3%, in practice and combination with an unfavourable exchange rate compared to the market rate, it may turn out that when withdrawing EUR 50 using a PLN card, we have overpaid by almost PLN 20. A lot, a little? A relative question, but there is really no need to waste this money. There are simple ways to protect yourself from similar losses. This applies both to private customers going on holiday with their families and to business customers going on a business trip abroad," says Robert Blaszczyk, Head of Strategic Clients Department at Conotoxia.
Multi-currency card - a must-have or a gadget?
A multi-currency card seems to be the most beneficial solution for private or business payments in foreign currencies, but also for ATM withdrawals. Getting a multi-currency card usually involves a one-off expense, which is likely to pay off quickly. The card can be used abroad and, for example, when shopping in foreign online shops. In such situations, it also brings measurable benefits.
A multi-currency card is linked to several, tens or even dozens of accounts in different currencies. When a payment is made, the card usually automatically recognises the transaction currency and withdraws the amount from the relevant account. So if the payment is in euros, the money will be taken from the euro account.
"When using a multi-currency card, we avoid most of the surprises associated with additional currency conversion fees, and only the amount of the transaction is debited from our account," adds Robert Blaszczyk of Conotoxia.
What if there are no euros in the account? First of all, with the best cards, and let's take the product made available by the fintech Conotoxia as an example, funds can be transferred from the currency wallet to the designated account in real time. Secondly, they can be withdrawn - without commission or fees - from an account in another currency.
Beware of DDC and surcharge
"With a card, whether a PLN or multi-currency card, at a foreign ATM, you can fall into the trap of DDC, i.e. dynamic currency conversion. DDC is generally disadvantageous to the user. Fortunately, information about this option should be displayed on the machine before the transaction is authorised. It is, therefore, important to read the messages that appear on the ATM screen carefully and not to agree to the operator's currency conversion," explains the Conotoxia expert.
Using foreign ATMs also involves the risk of paying a surcharge, a fee quite common in Greece, for example, which is charged by the machine operator rather than the card issuer. The reasoning behind its charging comes down to the maintenance of the technology and the physical operation of the ATM, i.e. servicing, repairs, loading with cash, etc., and the amounts usually amount to several PLN per transaction.
Some EU countries have already banned surcharging. Where the fee is still charged, ATMs display information about this before approving the transaction, potentially giving you the option of not withdrawing at that location and seeking another ATM.
Keep in mind limits on the amount and number of transactions
Multi-currency card issuers boast that they allow you to withdraw money from foreign ATMs without commission and with favourable currency conversion. However, bear in mind one thing. Such privileges are often limited. This means that in one month, you can withdraw, for example, one thousand euros or the equivalent amount in another currency without any additional costs. It may also happen that the number of operations will condition the commission-free status here: e.g. two withdrawals in a month free of charge and subsequent ones subject to a 2% commission.
"Either way, multi-currency card transactions abroad will prove more rewarding than using a standard debit card. The ability to link it to payments made by smartphone or watch adds convenience and security. In this respect, the fact that a multi-currency card can be topped up only with the amount we intend to spend, e.g. during one trip or specific purchases, storing the rest in an account or currency wallet, also seems important," concludes Robert Blaszczyk of fintech Conotoxia.
Multi-currency card for payments worldwide
