Comparative analysis of foreign exchange rates with Swiss debit cards

How does a foreign exchange rate work when paying in a foreign currency?

When you pay with your Swiss debit card in another currency than CHF, usually your bank applies a couple of fees:

All banks start with the same foundation, the interbank buy/sell rate which is the real exchange rate between two currencies.

Then, banks start adding mark-ups and fees that make your payment more expensive than it should be:

• Adding a hidden margin/ mark-up on the exchange rate creates a more expensive exchange rate compared to the real rate. This is done by the card schemes (Visa/ Mastercard rates as used by many digital banks) or directly by traditional banks.
  
• Adding transaction fees: x % on the amount spent (for ex, 2%) and/ or an additional fixed fee (for example CHF 1.50 per transaction)
• Adding handling/ processing fees.

At radicant, we have decided to apply no fees at all! No mark-up fees, no transaction fees, nothing. We just apply the interbank buy/sell rate.

The method

This study was conducted on Tuesday the 19th of March 2024 by comparing the foreign exchange rates of debit/credit cards of 6 different banks:

• Revolut VISA Debit (account in CHF)
• Yuh Debit Mastercard (account in CHF)
• Neon Debit Mastercard
• PostFinance Debit Mastercard
• Migros Bank VISA Debit
• CSX Debit Mastercard

We selected these banks for one of these two reasons: banks with high market share in Switzerland or banks claiming to have low foreign exchange fees.

The respective exchange rate was collected through the app of each bank, after making a payment with the respective cards and receiving the fully booked transaction.

Comparison

100 € spent with the respective cards on the 19th of March 2024:

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Disclaimer

The payments with the different banks were made at different points in time, between 11:00 and 15:00 CET, during which:

• the mid-market rate went from 0.9624 (at 11:00) to 0.9631 (at 13:00) to 0,9640 (at 15:00)¹, with a day average of 0.9651².
• radicant rate went from 0.9623 (at 11:00) to 0.9628 (at 13:00) to 0.9637 (at 15:00).

Please note that some banks apply the exchange rate at the moment of the payment while others like radicant apply the rate when the transaction is fully booked (which means 1 to 2 days later).

¹ https://www.xe.com/currencycharts/?from=EUR&to=CHF&view=1Y
² https://www.exchange-rates.org/exchange-rate-history/eur-chf-2024-03-19

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