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13 Jul 2016

Amazon Currency Converter vs Your Credit Card

Amazon Prime Day Comes to India on August 8-10. The service has just opened in India as Amazon invests $5bn to target the large market and in a bid to increase subscriptions, Amazon is  wasting little time before launching a two day sale. Given the fact that issues with servers has spoilt the bargain shopping for customers on both of the previous Prime Day event, Indian shoppers should expect both deals and difficulties at checkout. Sellers will be losing some of their profits to the notorious high fees Amazon charges on its Currency Converter for Sellers. This has buyers wondering whether they should use Amazon’s Currency Calculator or stick with letting their bank make the exchange.
Visa and MasterCard Activation Option
Say you buy something sold in a foreign currency from Amazon UK with your UK Visa or MasterCard debit or credit card. You are offered the option of paying in pounds sterling or you can activate Amazon’s currency calculator and pay in the seller’s currency. When you activate it you can see exactly what your Amazon purchase will cost you.
To Use the Convenient Converter…or…
Once upon a time Amazon was a little US based book seller. Now the global e-commerce giant is the biggest provider of international cross-border purchases. That necessitated putting in an embedded currency exchange functionality-like PayPal which sprang from eBay. PayPal makes a profit on marking up the mid-market exchange rate.
One of the real benefits of the currency converter is knowing precisely what you will pay. A second positive point is that should your purchase arrive and disappoint you, your refund will be exactly what you had spent-even if the exchange rate has changed.
Also, Amazon’s Currency Converter supports almost every country’s currency, which means it works really well to give you access to a global marketplace.
…Not to Use the Convenient Converter…
Amazon doesn’t suggest its exchange rates come near to mid-market. They state:”Amazon is consistently working hard to ensure that we receive a competitive exchange rate from our bank service provider to offer payment. The exchange rates used for the Amazon Currency Converter are generally updated daily.” That last bit “generally updated daily” is worrisome. Fair enough, they mark up the mid-market rate, but currency rates fluctuate wildly sometimes-as seen with the pound sterling at the referendum.
Should you choose not to activate Amazon’s currency calculator, you’ll be letting your credit card make the exchange rate conversion. Naturally they mark up the mid-market rate and add a fee, but you don’t find out exactly what that will be until your statement comes-which makes many people nervous-so they opt for Amazon’s rate because having the information available instantly seems safer.

High Bank exchange Rates or Amazon?
However, if your card charges less than 4%-which many do- you’ll save yourself money by sticking with your bank’s exchange rate. This sounds counter intuitive, since we know banks have the worst exchange rates, but it’s most often true. Typically, Amazon’s mark-up is higher than your debit or credit card’s is.
When you use Amazon’s calculator, you’re paying more for the option of knowing exactly what your total purchase price is instantly. Neither your bank, nor Amazon provide exchange rates near mid-market. The only way you can really beat the big banks is to exchange money with a specialist currency company.
When it comes to getting the best bargains on Amazon, remember that better exchange rates come to those who wait! Another option to consider is a Barclay’s card which offers Freedom Rewards. 35,000 Freedom points can be redeemed for a £100 Amazon e-voucher. Barclay’s has teamed up with Amazon to create click and collect delivery outlets at its branches across London.