ATM results survey

andy a · #1 02-03-2003, 02:14 PM

Lately there have been discussions concerning the slippage (loss) in the use of ATM cards versus what one could get with cash.

Since this hits us all (most, at least) right in the pocketbook, I'd like to take a survey to find out for all of us just how big a problem it is.

If you are interested, could you please fill in 3 numbers for a little equation:
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1) RATE = number of pesos per dollar paid on that date by the local casa de cambio (exchange house).

2) DEBIT = amount charged against your account by your bank for the transaction.

3) PESOS = number of pesos you got from the ATM.
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Explanation:
In 1) above, the rate paid by casa de cambios should be entered because it is normally the best rate available. I suspect that much of the confusion on this subject is by people using bank rates, which are much worse.

If anyone doesn't have the moneychangers' rate for that day, indicate the date, please. The approximate rate can then be ascertained from archived information. In fact, the date is a good idea anyway, even if not necessary.

In 2) above, the amount that your bank charged your account will probably need to be determined online. Service charges, typically 1 or 2 dollars, are insignificant and can be ignored.
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The equation is this:

Slippage = 100 * (1 - PESOS/(DEBIT * RATE)).

a) Multiply DEBIT by RATE.
b) Divide PESOS by the result in a).
c) Subtract the result in b) from the number 1.
d) Multiply the result in c) by 100 to make the slippage be in percent.

If anyone is intimidated by the math, don't bother - I'll figure it out for you (us) from your post.
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Example (hypothetical):
On Feb. 3, the exchange houses pay 22.0 to 1. Our hero withdraws 4000 pesos from an ATM. Later, he goes online to find that his bank charged him $190.00 for the transaction.

The equation is then solved thusly (numbers rounded off):
Multiply 190.00 by 22.0. Result is 4180.00.
Divide 4000 by 4180.00. Result is 0.9569.
1 minus 0.9569 is .0430.
100 times .0430 is 4.30 percent for the slippage.
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By the way, the equation will work for any currency, not just dollars.

In my experience, it amounts to about 7%, but some posters have said that it was negligible for them. I don't know why it would vary significantly from bank to bank, so I'd like to find out for all of us just what to expect. It would certainly be worth switching banks if the saving would be substantial.

Sharron · #2 02-03-2003, 03:44 PM

Happy to help with your survey. I am interested in the results as I am returning in March for a minimum 3 month period to get to know the country a little better.

I'll take up your offer of doing the maths for me though.

Sorry I don't know the exchange house rates but the other information you require is as follows:

Withdrawal Date amount withdrawn Charged by bank
9 December 02 3000 pesos £89.11
11 December 02 3000 pesos £83.63
16 December 02 3000 pesos £89.11

Hope this helps

andy a · #3 02-03-2003, 04:42 PM

According to Oanda.com, the interbank rates on those days for pounds were:

12/09/02 35.48
12/11/02 35.28
12/16/02 32.91

Comparing Oanda's rates to the dollar rates that I remember, they were pretty close to what I could get at the casa de cambios.

According to your figures, on 12/09 you lost 5.11%, which is about inline with what I lost on the dollar the one time I checked.

On 12/11 you gained 1.68% and on 12/16 you gained 2.30%. Are you sure that your figures were correct for those days?

Sharron · #4 02-03-2003, 04:59 PM

Thanks for doing the sums. I bank online and checked the figures in my account before posting them. I even made sure that the dates were the actual dates I took the money out and not the date it was processed by the bank.

I agree that the sums don't add up and am wondering what rate the banks in England use and where they get them from.

I hope that others complete your survey so we have a bigger picture.

I always thought that I did very well using this method as I used ATMs on my previous trip in September 02 and was pleasantly surprised when I did my own calculations on my return.

For additional information for each transaction my bank charged me £1.50, which didn't change however much I withdrew.

Regards
Sharron

andy a · #5 02-03-2003, 05:25 PM

In addition to being skeptical when it appears that one is being given free money, I also notice that your bank charged you the same for 2 different transactions, with drastically different exchange rates. Sure looks like a misprint.

Also, the service charge is significant, adding about 1.7% to the cost of the transaction.

Of course, a possible explanation is that the exchange rates were fluctuating rapidly at those times (true), and the bank updated several times per day, giving the customer (you) the benefit of the good timing. If so, your bank deserves an A+ for honesty.

Another possible explanation is that the free market rate, paid by the moneychangers, was even higher on those 2 days, such that you still lost (and didn't know it).

Sharron · #6 02-03-2003, 05:58 PM

Seeing that the misprint was seemingly in my favour I'll keep quiet. Whatever way I change my money there is a cost involved and at least this way I don't carry large amounts of cash on me.

Thank you
Sharron

andy a · #7 02-03-2003, 06:05 PM

Anybody else?

Criss Colon · #8 02-03-2003, 06:37 PM

I have heard people tell visitors and residents to pay with their foreign credit cards.There is a big "slippage" here too! Why not ask people for that figure too. On Nov.1st I had a charge of 115.08 billed to my card for a purchase of only 1,898.22 pesos,=16.5 to 1!!!!!!!!! Talk about slippage.The people who say the difference is negligable,or in their favor will have a real hard time blowing that smoke up my big fat ass!Cris

#9 02-03-2003, 07:08 PM

I personally have had very little "slippage" on my charge cards which I use frequently in the DR. Mine is only in the .25 to .30 area. The credit cards I use are Providian, Captial One, and Orchard Bank and I have been using them for 9 years with no problem.

andy a · #10 02-03-2003, 07:09 PM

I see that Oanda says that the rate that day was 19.13. One doesn't need a calculator to see that the loss was almost 15%.

In my case, I had been using an ATM quite a lot before I finally checked - and was jolted. How careless of me! Not that I had too many alternatives, though.

A good question is what causes it? Could it be that the dispensing institution in the DR takes a cut?

Somebody in another thread said that he uses Chase Manhattan with little or no slippage - is it possible? I know that Chase Manhattan is often (maybe always) the intermediary for bank to bank transfers to the DR - do they perhaps offer a break that no other bank can?