When a card transaction is made abroad, bank applications are generally calculated based on;
- A percentage commission
- A fixed commission
- An exchange rate margin parameter:
The transaction flow is roughly as follows:
- The customer initiates a cash withdrawal request at a foreign ATM.
- Visa/Mastercard sends the transaction amounts to the issuer bank in the original currency (e.g., Rial) and in Dollars (based on the current exchange rate).
- Based on the amount sent in Dollars, the issuer bank (the card-issuing bank) converts it into its own currency. (TL in Turkey)
- During the conversion, the commission to be charged and the exchange rate margin to be applied are used.
- The relevant amount is deducted from the customer's account in TL and the transaction is approved.
- The customer withdraws their money from the foreign ATM in the original currency (e.g., Rial).
- Two days later, Mastercard/Visa sends the original transaction amount and the transaction amount in Dollars, based on the exchange rate at that time, via a clearing file.
- The card-issuing bank reflects any amount differences (the difference between the exchange rate at the time of authorization and the exchange rate at the time of clearing) to the customer as a debit or credit.
For example, when a cash withdrawal of 100 Rial is made abroad;
Mastercard/Visa sends the information of 100 Rial and 26.66 Dollars to the card-issuing bank.
The card-issuing bank converts the 26.66 Dollars into TL according to its own parameters (for example, a 1% commission, 1 TL fixed commission, exchange rate margin = 1%)
- 1 Dollar = 5.50 TL
- 5.56 TL when a 1% exchange rate margin is applied
- (Transaction Amount X Exchange Rate Margin X Commission) + Fixed Commission Amount (26.66 x 5.56 x 1.01) +1= 832.64 TL is deducted from the customer's account.
If, two days later, the clearing file shows the transaction amount as 26.88 Dollars, the TL equivalent of the 0.22 Dollar difference is collected from the customer's account.
