Saturday, November 9, 2013

How tourists in Poland can enjoy cheaper holidays

In my previous post I described growing popularity in Poland of mobile payments and various initiatives, as IKO, challenging credit cards companies. The highest  credit card transaction costs in Europe made mobile payments a very attractive option for both consumers and retailers.

In September Polish Parliament passed the amendment to the Act on Payment Services and as result from 2014 the maximum interchange fee of 0.5% will be introduced on all Polish payment cards

While Poles are going to take advantage from much lower , closer to the EU standards, interchange fees the tourists need to be aware of quite common practices of offering Euro payments, instead of Zloty, while using credit/bank cards. The offered Euro payment option comes across as something you at least understand and can trust. However it can be very expensive. How expensive I tried to figure out myself while using Euronet ATM machine in Krakow on 19th October 2013.
While withdrawing  500 Polish Zloty I was offered Euro exchange rate option.  I neglected that option as I found the offered exchange rate too low.
A few minutes later, however, I did decide to use the offered  exchange rate, as you can see in the attached receipt,  1 Euro = 3.775 Zloty (PLN), to find out how bad the offered exchange rate was.
Not choosing the Euro option was very beneficial for me: my bank ABN AMRO applied an exchange rate 4.1397 zl for 1 Euro and I only paid  120,78 Euro (including 2.75 Euro transaction costs) for 500 Zloty instead  of the 132,4 Euro charged by Euronet.
According to ECB the official exchange rate that day was 1 Euro = 4.1808 Zloty. Using Euronet exchange rate you pay 10% more for Zloty than you should using the official exchange rate.

What at first glance came across as an advantage appeared to be a very expensive option.

I found the following  statement on the Euronet receipt very interesting:

"I have chosen not to use the Mastercard currency conversion process and agree that I will have no recourse agains Mastercard concerning the currency conversion or its disclosure" 

All in all you can enjoy your holidays in Poland for even 10% cheaper if you  do not accept payments in Euro and rely on your own bank currency exchange rate, use the country's biggest ATM network of PKO Bank Polski or find a trusted specialised currency exchange office (kantor)

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