Hello All:

We are U.S. incorporated and actually operate from the U.S. as well as Europe. We have about 50% of our expenses in Europe, but all income generated from Europe also goes to our Citibank merchant account.

PROBLEM: Citibank just introduced a new fee ... they now take 1% of every expense NOT done in US$ ... so, if we pay for a €1,000 invoice in Euro (e.g. using their Master debit card or wiring) then they take €10 (about $13) as a fee. For us that's an annual difference of over $1,000 just there in bank fees.

Can anyone suggest another U.S. bank offering merchant accounts that do not imply such currency conversion fees?

John

Are they charging for currency conversion on sales you take in Euros and settle in USD? If so, you could try getting an account that allows processing in Euros and settle in Euros, so there is no currency conversion. If they are charging conversion on purchases you make, I don't thinks its related to the merchant account.

Any sort of currency conversion ... in our case here it's about purchases. And yes, it's not related to the account type (business account) -- they just introduced this a month ago for all account types. But my question is about business accounts -- we are looking for another business account where the bank does not charge for this, as did Citibank before.

Citibank is charging you 1% for currency conversion on purchases you make with a Citibank issued V/MC credit/debit when you purchase anything outside the US?

If so, they are actually not working you over too badly, since the 1% charge is a pass along from V/MC (I think this went into effect last year at some point, at different times for Visa and MC, so Citibank must have been absorbing the charge for some amount of time). Its not uncommon for issuers to tack on 1-2 points to the V/MC charge (just because they can).

You'd have to either get a card issued in Europe that transacts in Euros or find a US issuer that absorbs the charge (I think Capitol One may do this, but I am not sure).

Intersting ... but that isn't it exactly: any sort of conversion is now 1% -- If I wire money in Euro I also now pay 1% more than before.

I am not super familiar with charges for wire transfer, but I think 1% for currency conversion in general is a pretty good deal (although, less obviously is better). Some banks can charge as much as 4%. Setting up in Europe and paying in Euros avoids it, but then you are liable for VAT, so probably it is not much better...If Citibank can give you a Euro account, that might save some money. Unfortunately, I am not familiar enough with the issue to recommend any banks that would be cheaper...but I would be interested in getting some follow-up, if you find something better. Best of luck!

Some merchant providers do not charge for currency conversion. Just have to do some research to find which ones are available.

If you have a merchant account with CitiBank - do you also have a SSN etc? If so, then you might have a good chance of getting a merchant account wiht almost any MAP.

If you don't have a SSN, getting a merchant account is a bit more difficult, but it is possible as long as you have the United States bank account, United States address, and United States phone number.

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I thought so basic - but just wanted to confirm. It was a bit confusing on merchant account or consumer side since the thread had both issues.

I would stay away from Capital One (http://www.washingtonpost.com/ac2/wp-dyn/A25109-2004Dec24) actually if you care about your credit report.

Check into banks that have a presence in both places - HSBC I believe does. And then maybe you can transfer money between both banks. HSBC offers merchant accounts but then again, you can get that from any MAP.

Why don't you use your EU bank accounts or cards to issue payments in euro or to pay bills? There is always a fee when you convert currency. I understand that inflicting an additional 1% is not good for you however. But I can also say my bank charges $30 for sending international wire transfer. Those are regular bank fees. You always ask other banks if they are going to charge for payments made overseas.