Question and warning about ATM in Lisbon

[motero99]

I arrived in Lisbon this morning. I heard the blue and yellow ATMs had exorbitant fees, so avoided them. Went to an ATM at Caixa. Started the withdrawal of 200 euros. A warning came up that the commission was 13.25 %. I was asked if I accepted or rejected the commission rate. I rejected it. The system acted like I would have expected, that the transaction was aborted. My card was unlocked immediately so I took it and left. Went up the street to Santender Bank and tried an ATM. Same 13.25 commission, so I rejected the transaction. This time it would not unlock my card immediately. When it finally did, I took the card and left. The person behind me chased me down and handed me my money and a receipt. So how do you cancel a withdrawl in Portugal? If rejecting the commission rate does not do it, how do back out of a transaction? I have never had this happen in any other country. I looked up my account and it looks like Caixa also withdrew money.
Is 13.25% the norm in Portugal? If not, what banks have people found to be good?

 

[henrythedog]

Who is your card issuer and were you using a debit card?

The Caixa transaction is hopefully a temporary hold; unless whoever was behind you in that queue was not so keen to find you.

 

[jungleboy]

Portuguese banks don’t operate their own ATMs. Instead, the Multibanco (MB) network operates ATMs for 27 banks in Portugal (Wikipedia article here). I have a Portuguese card so I don’t know about foreign card issues, but going to a different bank to try their ATM will not produce different results because it will still be an MB ATM.

 

[trecile]

Was 13.25% the commission or conversion rate? I always reject the conversion rate - I get a better deal from my bank's conversion rate. When you reject the conversion your transaction continues without it.

Also, when paying by credit or debit card always choose Euros for currency, and reject the "convenience" of paying in your home currency - it only benefits the bank and/or vendor.

 

[Wendy Werneth]

When you reject the conversion your transaction continues without it.

This is true. I suspect what happened is that the transaction went through without the conversion both times, and unfortunately the first time no one ran after the OP to give them their money.

Also, when paying by credit or debit card always choose Euros for currency, and reject the "convenience" of paying in your home currency - it only benefits the bank and/or vendor.

Now I'm confused, @trecile I thought the general advice on this forum has been to pay in your home currency, not in euros. Wouldn't paying in euros be the same as accepting the lousy conversion rate offered at an ATM?

 

[henrythedog]

This is true. I suspect what happened is that the transaction went through without the conversion both times, and unfortunately the first time no one ran after the OP to give them their money.

Now I'm confused, @trecile I thought the general advice on this forum has been to pay in your home currency, not in euros. Wouldn't paying in euros be the same as accepting the lousy conversion rate offered at an ATM?

No Wendy; I think the consistent advice has been to select Euros and let your own bank or card provider do the conversion.

 

[trecile]

Now I'm confused, @trecile I thought the general advice on this forum has been to pay in your home currency, not in euros. Wouldn't paying in euros be the same as accepting the lousy conversion rate offered at an ATM?

No Wendy; I think the consistent advice has been to select Euros and let your own bank or card provider do the conversion.

Yes, exactly what @henrythedog said.

Here's an article explaining it.

Understanding and avoiding dynamic currency conversion - The Points Guy - The Points Guy

When visiting another country, dynamic currency conversion allows you to pay in your home currency. Here's why you shouldn't use it.

thepointsguy.com

 

[Wendy Werneth]

Thanks very much, @trecile ! Since I use a Wise card when traveling I generally don't have to worry about this stuff, but I'm about to lead a tour group around Portugal, made up mostly of Americans, so it's good to be able to advise them correctly.

 

[NSwalker]

Further to your warning, here is a related cautionary tale. I walked the CP from Lisboa in April this year. In Coimbra I tried to take money out of a Santander MB ATM. They charge a very high conversion fee but offer the option to reject the fee and allow your home bank to convert the currency. I selected the option to reject the fee (you have to reject twice) and then received a message stating that the service was not available. So I cancelled and tried again with the same result. I tried again later in the evening at another Santander MB ATM, also the service was not available, this time the ATM confiscated my Canadian bank card. I went to the attached branch the next morning, they were unwilling / unable to retrieve my card. I assume that a computer somewhere assessed my repeated attempts as suspicious. Fortunately we were able to continue using my wife's bank card and were always able to reject the transaction fee. The lesson that I took from this is to not repeatedly cancel and retry transactions.

 

[lt56ny]

I see you are from the United States. If I were you I would open an account with Charles Schwab. Use their ATM card and they reimburse you for any banking fees anywhere in the world.

 

[motero99]

Thank you all for your replies. It clears uo my confusion. After an all night flight and swimming up stream against the ctowds from a cruise ship around the Cathedral Se and Ingreja Santiago, I was in a hurry to start walking. I will know what to expect. I probably should have looked for a cancel button on the keyboard. There is hope, that seemed to be a little used atm in a bank office. When I went back, they told me that if the money was not picked up within a short time, it would be sucked back into the ATM and the daily reconciliation would note it. I did use a Schwab card.

 

[WGroleau]

I see you are from the United States. If I were you I would open an account with Charles Schwab. Use their ATM card and they reimburse you for any banking fees anywhere in the world.

I have one. They reimburse ATM usage fees, but not the "commission" I was once charged. One bank (no longer there) in Los Arcos warned me about the €4 euro fee, but not about the 13% commission that was only revealed on the printed receipt afterward. (And the option to let Schwab do the conversion wasn't offered.)

 

[Sandi Smith]

This is true. I suspect what happened is that the transaction went through without the conversion both times, and unfortunately the first time no one ran after the OP to give them their money.

Now I'm confused, @trecile I thought the general advice on this forum has been to pay in your home currency, not in euros. Wouldn't paying in euros be the same as accepting the lousy conversion rate offered at an ATM?

Never pay in your home currency. Let your bank do it back home. The rate is always better

 

[lt56ny]

I have one. They reimburse ATM usage fees, but not the "commission" I was once charged. One bank (no longer there) in Los Arcos warned me about the €4 euro fee, but not about the 13% commission that was only revealed on the printed receipt afterward. (And the option to let Schwab do the conversion wasn't offered.)

I have never seen commission fees on my Schab statement. I will call to find out. Maybe it is different for different accounts?

 

[DoxNox]

This seems to be pervasive. See attached receipt. Mutibanco paid in DCC and added 13% charge to their "conversion" rate to convert 1.23 $ per Euro (Schwab card was used).

 

[jungleboy]

This is not an advertisement for Wise ... but everyone travelling overseas who is bothered by currency conversion etc fees should consider opening a Wise account. With Wise, you can open balances in many currencies within your account. So if, for example, you are American, you can have a bank balance in euros in your Wise account (in addition to dollars and whatever other major currency you like). To top up your euro balance, you can transfer from your USD (or whatever else) balance in seconds for a very low fee. Then when you travel in Europe, use your Wise card (Mastercard) both for paying by card and for ATMs, and foreign currency conversion is no longer an issue. Honestly, Wise has been brilliant for us.

 

[Wendy Werneth]

As the other half of "we" in @jungleboy 's post above, I second this recommendation. Here is my "refer a friend" link that you can use to sign up for a Wise account and get a fee-free transfer of up to €500.

 

[WGroleau]

I have never seen commission fees on my Schab statement. I will call to find out. Maybe it is different for different accounts?

I don't think it was on the Schwab statement. The <censored> ATM computed 1.14 times the correct dollar amount and asked Schwab for that much. They didn't offer to let Schwab do the conversion, nor did they reveal the theft in advance.

 

[Kathar1na]

This seems to be pervasive. See attached receipt. Mutibanco paid in DCC and added 13% charge to their "conversion" rate to convert 1.23 $ per Euro (Schwab card was used). View attachment 147519

Thank you for posting a copy of this receipt, @DoxNox. It would be helpful if more people did this instead of only vaguely describing what they had been charged and being outraged.

Your receipt states clearly that "DCC" was accepted, i.e. Dynamic Currency Conversion. Of course not every ATM user knows what this means and Portuguese ATM users and users from the €-zone countries will never be offered this option and don't have to worry about it.

I did not know what SIBS means. In Portugal, it is apparently the central utility for payments, running the payment system end-to-end for more than 30 years, serving Banks, the Central Bank, government, etc. I guess that their exchange rate for €<-->$ includes already a margin in view of the rate communicated daily (for information purposes only) by the European Central Bank ECB. Whether you withdraw money from an ATM or pay by card, there is aways a markup for currency conversion even when you refuse DCC as you should. People may not even be aware of this currency conversion fee because it is often rolled into the foreign transaction fee or the purchasing price expressed in $ on your bank statement that you eventual see after your return home. This Forbes article sheds some light on the difference between foreign transaction fees and currency conversion fees which are of course different from any ATM withdrawal fees let alone any DCC markup.

 

[Kathar1na]

What would be interesting to see is a Portuguese MB Multibanco receipt from the same day (16 May 2023) or close to that date where DCC had not been accepted but where a €/US $ conversion is involved at some point in the transaction process.

FWIW, the ECB's Euro Foreign Exchange Reference Rate for USD was fixed at 1.0881 on that day but I am pretty certain that you will never be offered this rate by anyone anywhere.

 

[DoxNox]

Thanks everyone for their responses and in retrospect accepting DCC may well have been my error/downfall on may 16. On the same day using Capital One credit card, a vodphone purchase to final conversions were 1.089. See attached

 

[WGroleau]

Whether you withdraw money from an ATM or pay by card, there is aways a markup for currency conversion even when you refuse DCC as you should.

I don't recall ever being asked about DCC in those terms, but I always reject having the conversion done by other than Schwab. When Schwab does the conversion, the "fee" is the extremely tiny difference between the Visa rate and the "official" rate. In the one case where I was ripped off, there was no question; merely the announcement afterward that they had stolen a ridiculous fourteen percent commission.

 

[Damotaman]

This is true. I suspect what happened is that the transaction went through without the conversion both times, and unfortunately the first time no one ran after the OP to give them their money.

Now I'm confused, @trecile I thought the general advice on this forum has been to pay in your home currency, not in euros. Wouldn't paying in euros be the same as accepting the lousy conversion rate offered at an ATM?

DO NOT PAY IN YOUR HOME CURRENCY! When paying with your crdit card at a merchant, decline the conversion! when you withdraw cash from an ATM, DECLINE THERE EXCHANGE RATE! and decline their fees. its a rip off!!