Why are international payment values changing!?


#1

I am currently abroad and travelled through dubai to india. I used my starling card twice. Once in dubai at a restaurant and once so far in india. I track my finances in detail in a separate app which has all my bank accounts in it. So after each transaction i logged the cost in a separate app. After about a week The starling balance didn’t match the balance in my finance app. On closer inspection i noticed the two none GBP transactions had changed in value. I thought I must have recorded them wrong so updated the data in the finance app. Another week has passed and i noticed there was a balance discrepancy again and that the value for those same transaction has changed once again!!!

Why is this happening . Once I’ve made a purchase and the money is deducted then that should be it. The purchase value should not increase 2 weeks later which has happened in my case for both transactions.

Would be great to get an explanation for why this has happened.

Thanks


#2

This is also my issue. The trouble is Starling says the transactions are pending, but the app doesn’t make this obvious at all.


#3

If that is the excuse then I could accept that the transactions are in a pending state for a few days but for them to be in a pending state for 2 weeks is just crazy


#4

It is due to how the card schemes (MasterCard, Visa etc) work.

The initial presentment is effectively checking availability of funds and ring fencing an amount for the merchant to later be able to withdraw from your card.

Then they later send a final demand for these funds which may be a few hours, days or weeks later, and obviously the exchange rate will differ between those dates.

However it can get more complex as some merchants cancel the initial demand when the final demand is submitted, but others don’t bother cancelling the original one and just leave it on the system for it to cancel and drop off an account due to time limits. This is more common in USA than UK, and makes it look for a while that they have taken twice the amount when they haven’t.

With most currencies such as EUR or CHF a merchant charges in that currency and it gets converted to GBP, and if you book a car or hotel the deposit will be in that local currency. However in some countries like Japan, they do an initial authorisation to block or reserve funds that may be in USD and appear on your statement converted to GBP yet the ultimate transaction put thru as JPY and converted to GBP by the bank. So a purchase may have entries in 3 currencies, e.g. USD, JPY and GBP!

This is an oversimplification, as there are many more intricacies to the card scheme on how transactions are processed, transaction processing timescales, merchant liability, etc from one region of the world to another and different rules for different industries such as public transport, pay at pump “Automated Fuel Dispensers”, gambling, etc.

However hopefully it gives you a flavour for some of the issues involved when fintechs display data instantly, despite it only being provisional and subject to change.

In the old days when paper statements were issued every month or quarter any of these issues were not apparent as any transaction would have already been finalised before the statement issued.


#5

When you initially make the transaction, the current Mastercard rate is used; however Starling use the mastercard day rate to finalise the transaction which happens a day or two later (with no indication) and this day rate usually differs from the initial rate.

Unfortunately the app does not make this clear at all (i.e. there is no indication whatsoever that the amount can change because of this) and there is no notification of any adjustments either. Both of these things need to be implemented, it is not right that amounts can change without any indication whatsoever.

Furthermore, there’s no indication on the transaction list that a purchase was made in a local currency (like Monzo does for example). This is absolutely necessary in my opinion.


#6

Agree it would be nice to identify the rate change.

However the transaction list I’m not so sure. Why do you think that is necessary?


#7

Because when I make a purchase abroad, the price I remember is the the price in local currency.

For example, if i buy dinner here in Peru for 200 PEN, it shows up as £50 within the app, which while true, is not as useful as seeing the amount in local currency. Theres whitespace under the amount in the transaction list so it would make sense to add the amount in local currency when appropriate, which is how Monzo and Revolut do it.


#8

totally agree. I think the original currency amount and the exchange rate should appear on the initial provisional transaction and the final settled transaction.


#9

Unfortunately, it’s not just Starling. All credit/debit cards work that way.
When you get the initial spending notification, the money hasn’t actually left your account. It has just been reserved for the merchant to withdraw.
This withdrawal may happen a few days later, as merchants tend to batch-process these withdrawals as it can be cheaper. The bad news (or sometimes good news) is that the exchange rate has moved on since then (for the better or for the worse), which is why the rate changes. At that point, you will see the new rate. Starlung can’t predict when the merchant makes the withdrawal, so they can’t forecast the rate either.


#10

Presumably, at least for Euro transactions, and when Starling introduces Multi currency wallets/accounts, the conversion can occur earlier if you choose, so locking the exchange rate, at a time of your choosing (as occurs with Revolut now).

At least that’s my understanding of what Starling is planning?

Will be interesting to see what exchange rate protocol Starling will opt for.


#11

Do you mean the transaction list of have that detail when you click into the transaction?


#12

Thanks. I was being specific about the local currency being on the transaction list


#13

Fair point. I guess it’s just different ways of using the data. For me I don’t need to know if I spend 400 Usd on the main feed as I work in gdp. Knowing the local currency is useful for me sometimes but I’m happy to click into the transaction.


#14

I would expect the original foreign currency amount and GBP equivalent visible in the main transaction list but extra info like exchange rate used only visible when clicking on that transaction to go into an extra details screen.

There are different reasons why someone wants the original currency amount in the transaction list including if you have properties in two countries you want to see all your expenditure there in the currency it was made in, but more likely will be when people are on a business trip or taking part in an international sports even they need to account for their expenses correctly, and this means knowing the local currency amounts.


#18

I was just reading this thread and thinking the same. I have just returned from Cyprus and used my card a few times. The notification showed up instantly on my phone and within the app I could see EUR/GBP amounts and the rate at the time of making the purchase. A couple of days later they updated with a final rate and GBP amount.

It would be a great feature if, while in pending state, you can choose to lock in a rate (i.e. buy Euros or another currency) to protect against fluctuations. Obviously with a change the rate can change, you might get your goods cheaper, but I can imagine that a lot of people (especially those who like control over their finances and who might be tempted to a challenger bank) would like the security of a fixed rate.

Despite the rate fluctuation, using Starling was a huge improvement on previous foreign travels with previous bank cards when you don’t have a clue what you’ll be charged!