British holidaymakers lose about £500m over exchange rate costs

Published on : Wednesday, July 26, 2017

British holidaymakers like to visit literary touristWhen using their credit and debit cards abroad, British holidaymakers are paying hundreds of millions needless pounds.

 

In many of the overseas shops, cash machines and restaurants, the tourists are offered the option of paying in pounds rather than in the local currency and are applied a poor exchange rate if they take up the offer.

 

They apply poor exchange rates equivalent to charging up to 10 per cent extra if the customer chooses to pay in pounds, according to currency trader FairFX. About a fifth of all foreign transactions are subject to the charges, at an average cost of six per cent.

 

Analysis for the BBC has found that this costs UK tourists about £500m a year.

 

In Netherlands, where at least half of British card payments are made in pounds is now one of the key danger areas. It prompted Dutch consumer group Consumentenbon to urge visitors to be wary of the situation.

 

A high proportion of shops and bars in Amsterdam, the ones popular with tourists, offer dynamic currency conversion. However, the dynamic currency conversion leaves the British tourists confused and  is sold as an extra convenience.

 

The gains are typically split between the trader and their payment processor, meaning businesses can recoup their banking costs and often make a profit.

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