Mastercard Changes Currency Conversion Rules

From August 11, Mastercard introduced changes to its rules regarding currency conversion rates for cashless transactions requiring conversion. Changes in the company's rules regarding currency conversion rates and the introduction of a single rate for authorization and clearing of settlements will allow Mastercard partner banks to simplify and improve the financial management of card accounts.

Changes in the company's rules regarding currency conversion rates and the introduction of a single rate for authorization and clearing of settlements will allow Mastercard partner banks to simplify and improve financial management of card accounts, as well as prevent financial risks associated with currency conversion.

Mastercard, at the same time, does not affect the financial relations of the card issuing bank and the cardholder, therefore banks have the right to determine their own conditions for servicing their customers, including transactions that require currency conversion.

The terms of such transactions are governed by the card account service agreement concluded between the bank that issued the card and the cardholder.

Where earlier when authorizing a payment (during settlement) and clearing (during an interbank settlement), different exchange rates were used - at the time of authorization and clearing, respectively. According to the new rules, in the future a single conversion rate will be applied: the payment clearing rate will be the same as for payment authorization.

The new Mastercard rules are beneficial to customers who pay for purchases abroad in another currency with a card in dollars or euros - they get the opportunity to see the conversion rate of the payment system and estimate the amount of their expenses. It is primarily beneficial for travelers who pay with a card in countries with highly volatile currencies, including South Africa, Indonesia, Vietnam, and Turkey.