Tourists in Poland lose money accepting payments in Euro

Since my last post about "unfair" exchange rates offered by the Euronet ATMs,  most of the payment terminals in Poland introduced the possibility of payments in Euro as an alternative to payments in local currency Polish Zloty. The Polcard terminals are labeled with encouraging slogans such as;

“Card payment in your currency ! OK ?"

"Kartenzahlung in Euro ! OK ?"

I have also seen DCC logo standing for Dynamic Currency Conversion,  informing tourists about the possibility of payments in their own currency. It’ s all about the convenience of payments in the currency you are used to in your own country. Unfortunately this convenience, based on my analysis, can be very expensive. 

In general accepting offered exchange rates by the payment terminals or ATMs means losing money. I decided to do a little analysis and collected all my payment transactions from the 26th of December using different payment cards and ATM’s. My analysis still shows that the worst exchange rate is offered by Euronet.

On 26th of December the official bank exchange rate reported by the European Central Bank was;

1 EUR = 4,3078 PLN or 1 PLN = 0,2321 EURO

On that day I was offered by Euronet 3,9123 Polish Zloty for one Euro, exactly 9,5% less than the official exchange rate.

On the same day Bank PKO offered 4,168803 Polish Zloty for one Euro which was 3,24% less than the official exchange rate and 6,5% more than the Euro exchange rate offered by Euronet.

I made two transactions using the payment terminals. While paying 108 Zloty for delicious hot chocolate and deserts at Wedel I was offered 4,1698 Zloty for one Euro (0,2397902 Euro for one zloty)

This was not bad as it was very close to the exchange rate offered by the PKO BP. The other terminal did not offer any Euro payment options and  my own bank (ABN-AMRO)  applied the following Euro exchange rate: 4,2895 Zloty for one Euro ( 0,2331 Euro for 1 Zloty). This was 3% more than the Euro exchange rate offered by the payment terminal.

As a tourist in Poland you should absolutely avoid the Euronet ATM.  The question is how much you can actually lose withdrawing 2000 Polish Zloty at Euronet ATM in comparison with PKO BP ATM?

See below!

For 2000 Polish Zloty you would pay 31,49 EURO more using the Euronet exchange rate when compared to the PKO BP ATM and 40 Euro more than at the exchange office "kantor" at Hotel Metropol in Warsaw. 

The best option is to pay using your own bank card, as my ABN-AMRO Bank offered by far the best Euro exchange rates. Reject Euro payment options offered by payment terminals and trust your own bank exchange rates.

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)