Wednesday, 13 July 2016

TravelEx Supercard - Not so Super anymore!

About a year ago, I was fortunate enough to be able to join in the pilot of the TravelEx SuperCard

This card offers 0% fees on foreign currency transactions, which saves a few pounds of the typical UK credit cards which charge anything from 50p to £2.50, plus up to 3% of the transaction amount.

Of course, I already had a 0% fee card for foreign currency, so this wasn't new... but what is new and special is that with Supercard, your transactions are recharged back to some other card in sterling - allowing you to gain cashback or loyalty points with that card as normal.
Additionally, all your transactions appear immediately in an App, showing you exactly how much you would be charged in pounds (and of course, emphasising the savings you'd made with Supercard).

This immediate display of the sterling amount turned out to be the most useful feature of the card, for me, since it allowed me to claim my work expenses immediately (instead of waiting for the transaction to clear).  It was also great on holiday, since I could keep a running total of the real cost of the trip.

Supercard has now launched publicly, with one significant change - they are now a Mastercard instead of Visa.

I haven't yet had chance to use this card abroad myself, but reports are coming in that people are being charged a mysterious extra charge.
Thankfully, the community at Head for Points has been quick to analyse these charges - my thanks to John in the comments there, who seems to have done a lot of research and analysis on this!

My interpretation of this is that Supercard is receiving the exchange rate data from Mastercard one day late.  This means that the transaction is initially being charged at "yesterday's" rate - and this is what is shown in the app as well.
Later, when Supercard receives the correct rate for the transaction date, they are doing an adjustment - so in fact, they are sticking perfectly to their own terms and conditions.
They've also stated on Twitter that if the rate had changed the other way, a refund would be issued instead (although, with Brexit, we've yet to see that in action!)


Assuming that this is all correct and true, financially we're probably still better off with the Mastercard solution - the statistics seem to show that the Mastercard rates are very slightly better than the Visa rates.

However, the fact that Supercard is now charging a second transaction to issue the correct exchange rate means that the app is no longer as useful for me as a traveller.  I can no longer rely on the figures shown to be the final charge, as I could before, since it is likely that a correction will be made a few days later.

This appears to be a limitation from Mastercard, since their exchange rate is defined based on the "Settlement Rate", which appears to be determined (or at least published) one day in arrears.

However, since at the moment Supercard is not updating the transaction on the App when the final exchange rate is determined, they appear to be in breach of their own terms and conditions!
In particular, section 7.5 indicates:
... Your statement will show:
(d) the exchange rate (where applicable) which applied to each Transaction;
(e) where applicable, the amount of each Transaction following a currency conversion (in GBP sterling) 

My only hope is that Supercard will update the App to reflect this more clearly (since it's unlikely that they can get "today's" Settlement Rate from Mastercard).
I would suggest the following improvements:
  • Mark the initial transaction as an "indicative rate" - perhaps faded grey, as is often used for pending transactions on online statements
  • As soon as the correct rate is available, show that as the final rate in the app - ideally, it should be possible to do this within 24 hours of the transaction taking place
  • Instead of charging the linked credit card the full transaction amount immediately, put a hold on the "indicative" amount, and put through the full charge only once the real exchange rate is known.
Sadly, I think the chances of this being changed correctly are very, very slim!