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Old 21.09.2015, 14:26
ChrisNeedsToKnow ChrisNeedsToKnow is offline
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Re: Multi Currency Credit Card

Don't want to interrupt your friendly exchanges, but I think yee are talking about 2 different issues / possible exposures:
  • #1 is all one currency:
  • Customer pays "x". As a result the creditcard company owes the merchant "x", while the client owes "x" to the creditcard company. (ignoring respective margins)
  • Possible exposure: The client doesn't pay up.
  • For Revolut this risk doesn't exist, as the card is strictly credit based.
  • #2 is the fact that the client can, in the case of Revolut, fx his balance between currencies, and even more so even intraday.
  • The customer might fx USD to GBP in the morning, GBP to EUR around noon, and completing the circle from EUR to USD in the evening.
  • Should he have done this with good timing, the customer might have more USD on his account than in the morning. Someone must bear this gain as a loss.
I guess the answer to #2 is that "optimalpayments" provide their services to quite a bunch of Fintechs, so really they will always have demand of most currencies in most directions, so they can offset one demand against another. I´d imagine them as combining peer-to-peer exchange demands in such big amounts, that they can live purely off the interest made by holding those funds, and/or of a markup on the 4th digit after the dot (0.000x).

Should above be correct, it's also obvious who bears the imaginatory loss as per above: Whoever peer-to-peerd the other way.
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