Amid fierce competition among Ukrainian banks for customer traffic, the most favorable foreign currency purchase rates today are offered not by street exchange kiosks or even bank branches, but by mobile banking applications. Serhiy Mamedov, Chairman of the Management Board of Globus Bank, discussed this on the RBC-Ukraine podcast "CE BAZA." According to him, financial institutions often set online exchange rates even at a loss for themselves, covering the difference through card transaction fees, known as interchange.
Why Cash Rates are Higher in Kiosks
Mamedov explained that the higher price of cash currency compared to the official National Bank rate is due to additional operational costs associated with replenishing cash desks. To transfer cashless currency from the interbank market into cash form, a financial institution is forced either to buy it from other banks or purchase it from the population through exchange offices. Margins and commission expenses are factored into the price, ultimately making the cash rate less attractive to the end consumer. At the same time, the banker emphasized that there is currently no shortage of cash currency in the market: during demand spikes, the NBU promptly supported financial institutions by selling cash to replenish cash desks, which quickly quelled the excitement.
The Mechanics of Loss-Making Rates and the Role of Interchange
The key argument in favor of buying currency through a banking app lies in the banks' business model. "When a person buys this currency onto their card, for the most part they later spend it from the card. The bank receives interchange, and these are additional commissions. Therefore, financial institutions are willing to work at a loss in terms of rate formation because other revenues cover it," Mamedov explained. Thus, the bank consciously sacrifices its margin on the currency transaction, counting on subsequent transactional income from the client's card payments. Constant competition for customer traffic continues among banks, so on different days of the week, each financial institution tries to offer the most attractive conditions.
Current Limits and Restrictions
The expert noted that Ukrainians are gradually getting used to cashless currency transactions, a trend facilitated by the National Bank's policy of expanding limits. Currently, citizens can buy currency online up to 200,000 hryvnias per month and transfer the equivalent of up to 100,000 hryvnias abroad. According to Mamedov's estimate, this volume is quite sufficient to cover the needs of the overwhelming majority of the population. The only requirement for large transactions remains the confirmation of the origin of funds.
Prospects for Currency Market Liberalization
Commenting on current currency restrictions, the Globus Bank CEO emphasized that curbing capital outflow is an absolutely justified step by the state during the active phase of the war. At the same time, he pointed out that in the future, after stabilization, Ukraine will have to gradually open up the market, as free capital movement is a mandatory condition for attracting foreign investment. The banker recommended that citizens not rush to exchange kiosks, but instead check rates in their smartphone banking apps to take advantage of the best offer of the day.
The material is prepared for informational purposes only and does not constitute financial or investment advice. Investments carry risks, including the potential total loss of capital. Before making any investment decisions, it is recommended to consult a licensed financial advisor.
