# foreign exchange rates for ATM withdrawals and wire transfers **URL:** \ **Category:** Factual Questions\ **Created:** [November 27, 2017, 3:50pm UTC](https://boards.straightdope.com/t/foreign-exchange-rates-for-atm-withdrawals-and-wire-transfers/802877 "2017-11-27T15:50:10Z")\ **Posts on this page:** 10\ **Page:** 1
**Author:** ![Machine\_Elf](https://avatars.discourse-cdn.com/v4/letter/m/82dd89/32.png) [@Machine\_Elf](https://boards.straightdope.com/u/Machine_Elf)\ **Post date:** [November 27, 2017, 3:50pm UTC](https://boards.straightdope.com/t/foreign-exchange-rates-for-atm-withdrawals-and-wire-transfers/802877/1 "2017-11-27T15:50:10Z")
I recently withdrew cash from my US-based bank account at an ATM in Japan; the exchange rate was exactly the market exchange rate for the day, about 113 yen per dollar. I also did a wire transfer from that same US-based bank account to an account in a Japanese bank around the same time. The market exchange rate that day was still around 113, but the exchange rate I got on the wire transfer was around 109. That’s before the wire transfer fees were applied by each bank. Why the different exchange rates for the two transactions? ---
**Author:** ![Tired\_and\_Cranky](https://avatars.discourse-cdn.com/v4/letter/t/a87d85/32.png) [@Tired\_and\_Cranky](https://boards.straightdope.com/u/Tired_and_Cranky)\ **Post date:** [November 27, 2017, 5:00pm UTC](https://boards.straightdope.com/t/foreign-exchange-rates-for-atm-withdrawals-and-wire-transfers/802877/2 "2017-11-27T17:00:14Z")
The ATM withdrawal rate was determined by the ATM/credit card network and in many cases, those are about the best rates available to individuals. A 2006 settlement effectively limits MasterCard and Visa’s ability to extract terrible transaction rates from customers through poor disclosure. Some issuing banks will add currency transaction fees foreign transactions but many offer them at no fee so this can be the best way for individuals to transact in foreign currency. > **[Credit Card Currency Conversion Rates: Are They Fair? - NerdWallet](https://www.nerdwallet.com/article/credit-cards/currency-conversion-rates-study)** > > The currency conversion rates applied by Visa and MasterCard when you use your card overseas are generally on par with market rates. The exchange rate on the wire transfer was probably chosen by the bank executing the wire and those are often done at poor exchange rates. If you were in the business of wiring Japan all the time, you would probably shop around for the bank with the best exchange rates. If you are regular person, you take what your current bank offers and don’t ask too many questions. You would probably have received an even worse rate if you were exchanging physical cash. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [November 27, 2017, 7:27pm UTC](https://boards.straightdope.com/t/foreign-exchange-rates-for-atm-withdrawals-and-wire-transfers/802877/3 "2017-11-27T19:27:18Z")
When you initiate the wire transfer, there should be a way to specify whether you want the U.S. bank to send Dollars (letting the Japan bank do the conversion) or to send Yen (doing the conversion itself). It sounds to me like the U.S. bank converted to Yen and didn’t give you as good a rate as the Japanese bank would have. ---
**Author:** ![Machine\_Elf](https://avatars.discourse-cdn.com/v4/letter/m/82dd89/32.png) [@Machine\_Elf](https://boards.straightdope.com/u/Machine_Elf)\ **Post date:** [November 27, 2017, 7:55pm UTC](https://boards.straightdope.com/t/foreign-exchange-rates-for-atm-withdrawals-and-wire-transfers/802877/4 "2017-11-27T19:55:50Z")
> [@septimus](#): > > It sounds to me like the U.S. bank converted to Yen and didn’t give you as good a rate as the Japanese bank would have. Why might the Japanese bank provide a better rate? ---
**Author:** ![Leaffan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/leaffan/32/299_2.png) [@Leaffan](https://boards.straightdope.com/u/Leaffan)\ **Post date:** [November 27, 2017, 8:01pm UTC](https://boards.straightdope.com/t/foreign-exchange-rates-for-atm-withdrawals-and-wire-transfers/802877/5 "2017-11-27T20:01:30Z")
> [@Machine\_Elf](#): > > Why might the Japanese bank provide a better rate? More regulation, oversight? ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [November 27, 2017, 8:43pm UTC](https://boards.straightdope.com/t/foreign-exchange-rates-for-atm-withdrawals-and-wire-transfers/802877/6 "2017-11-27T20:43:19Z")
> [@Machine\_Elf](#): > > Why might the Japanese bank provide a better rate? I don’t do a lot of money changing these days, except wire transfers $ –\> ฿ where I pay almost no fees and get the best rate: TT. The buy-sell spread on TT at this end is less than 1%. (That’s the spread on Dollar, Yen, Euro, HKD. Spread on GBP or SGD is about 2%; other currencies even higher.) But when I did travel a lot I found huge exchange-rate differences. In some countries little exchange shops gave better exchange rates than big banks; in other countries the opposite was true. _ **U.S. banks seemed universally to give bad rates.** _ I was in Hong Kong once on my way to Macao to gamble so I wanted a largish pile of Hongkong dollars, expecting to change it back unless I lost heavily. With a 2% fee each way I’d lose 4% of my bankroll for nothing. But I found that the Hongkong bank’s spread was ridiculously small: the round-trip fee was less than 0.1% or thereabouts! ---
**Author:** ![Machine\_Elf](https://avatars.discourse-cdn.com/v4/letter/m/82dd89/32.png) [@Machine\_Elf](https://boards.straightdope.com/u/Machine_Elf)\ **Post date:** [November 27, 2017, 9:17pm UTC](https://boards.straightdope.com/t/foreign-exchange-rates-for-atm-withdrawals-and-wire-transfers/802877/7 "2017-11-27T21:17:32Z")
> [@septimus](#): > > I don’t do a lot of money changing these days, except wire transfers $ –\> ฿ where I pay almost no fees and get the best rate: TT. The buy-sell spread on TT at this end is less than 1%. (That’s the spread on Dollar, Yen, Euro, HKD. Spread on GBP or SGD is about 2%; other currencies even higher.) What’s TT? A bank in Thailand? ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [November 27, 2017, 9:44pm UTC](https://boards.straightdope.com/t/foreign-exchange-rates-for-atm-withdrawals-and-wire-transfers/802877/8 "2017-11-27T21:44:22Z")
TT = ‘Telegraphic Transfer.’ I wasn’t trying to use a fancy synonym for ‘wire transfer’; ‘TT’ is just the oft-encountered acronym. IIRC, other instruments, e.g. traveller’s cheques, also get this best (‘TT’) rate. ---
**Author:** ![Machine\_Elf](https://avatars.discourse-cdn.com/v4/letter/m/82dd89/32.png) [@Machine\_Elf](https://boards.straightdope.com/u/Machine_Elf)\ **Post date:** [November 27, 2017, 9:58pm UTC](https://boards.straightdope.com/t/foreign-exchange-rates-for-atm-withdrawals-and-wire-transfers/802877/9 "2017-11-27T21:58:24Z")
> [@septimus](#): > > TT = ‘Telegraphic Transfer.’ I wasn’t trying to use a fancy synonym for ‘wire transfer’; ‘TT’ is just the oft-encountered acronym. IIRC, other instruments, e.g. traveller’s cheques, also get this best (‘TT’) rate. Making sure I understand you correctly…you’re saying that you get less than 1% spread on wire transfers (AKA telegraphic transfers) when you have the currency change done by a Japanese bank? ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [November 27, 2017, 10:16pm UTC](https://boards.straightdope.com/t/foreign-exchange-rates-for-atm-withdrawals-and-wire-transfers/802877/10 "2017-11-27T22:16:27Z")
I’ve never wired to/from Japan; and I’ve never wired from non-USD into Dollar. I was [quoting from this webpage about wire transfers to/from **Thailand** ’s largest commercial bank.](http://www.bangkokbank.com/BangkokBank/WebServices/Rates/Pages/FX_Rates.aspx) For USD they show “TT Buy 32.51 Sell 32.81” and I’ve previously confimed that I get their Buy TT rate when I have a U.S. bank send USD (not Thai baht!). Splitting the difference (32.81 - 32.51)/2 = 0.15, the “mark-up” on their TT’s would be 0.46% (if the buy and Sell markups are the same), or about 0.9% for a total “round-trip” spread (though I’ve never experimented with the other half of that “round trip”).