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Apple could purchase FX swaps and charge customers a "FX fluctuation surcharge". That's better than shutting down the store...

• joezydeco 12y ago
  Or they could charge customers in Euro and let the customers' banks handle the F/X rate.
  • toyg 12y ago
    I would expect that to have legal implications, commerce in foreign currency is usually regulated in different ways.
    • toomuchtodo 12y ago
      Possibly? I buy quite a bit of services from SaaS companies in foreign countries as a US citizen with my American Express, am charged in CAD and EUR without issue (converted to USD on my bill).
      • shapov 12y ago
        In Russia specifically it is illegal to advertise a price in any currency other than the Ruble.
        • joezydeco 12y ago
          Good point. Thanks for clarifying that.
    • justincormack 12y ago
      I saw comments that pricing in foreign currencies in retail is not allowed in Russia.
      • blawson 12y ago
        I think that's the case. From the UK's gov.uk site[0]: "It is illegal to pay directly for general transactions with dollars or Euros." [0] https://www.gov.uk/foreign-travel-advice/russia/money https://www.gov.uk/foreign-travel-advice/russia/money
    • ghshephard 12y ago
      Depends on the country - when I buy stuff in Dubai with a credit card, the clerk will frequently ask me if I wish to pay the bill in AED or USD.
      • 0x0 12y ago
        I thought the option to pay in your credit card's native currency abroad was basically just a scam where the shop makes up a ridiculous exchange rate on the spot to overcharge you.
        • saryant 12y ago
          It's a complete scam. It's called "Direct Currency Conversion" and it's a essentially the payment processor and merchant hoping the consumer doesn't know what's going on. Amex disallows on their network but Visa and Mastercard do not. Unfortunately, Amex also has forex fees on most of their cards.
          • wavefunction 12y ago
            It may be a scam for most cards, but I work for a company that does multi-currency cards that settle in the currency of your choice and our exchange rates are better than anything offered by anyone else in the card space. Just a bit more than interbank ForEX rates.
            • foobarqux 12y ago
              I wondered why this didn't exist but I guess it turns out it does. Where can I get one?
            • saryant 12y ago
              What does that have to do with DCC though? Maybe I'm missing something but that doesn't sound like it has anything to do with DCC. Any card with no forex fee is offering you a rate at just above the interbank rate if you avoid DCC.
            • 12y ago
  • prostoalex 12y ago
    This would cover the currency rate the day of transaction but would not protect them against losses during the time that it would take the transaction to clear.
• tjradcliffe 12y ago
  That presumes they have some idea of the short-term forward volatility of the rubble, which no one does right now. Otherwise they have no idea what the surcharge ought to be. Furthermore, setting up such things is not cost-free, and if the high-volatility situation is temporary (which is very likely) it could well be that it isn't worth the cost, complexity and risk.
  • martinko 12y ago
    >Otherwise they have no idea what the surcharge ought to be. Nonsense. The surcharge is the difference between the spot rate and the futures rate with which they hedge. They can easily predict (to a reasonable degree) the volume they need to hedge by estimating their market.
  • acchow 12y ago
    > That presumes they have some idea of the short-term forward volatility of the rubble, which no one does right now The derivatives market still exists and you can null out future FX risk by paying whatever the derivatives market is charging for it now and passing that cost onto consumers.
  • Kadin 12y ago
    You base the surcharge on what the swap costs. The cost of the swap takes into account the market's idea of what the ruble is going to do vs. the dollar. Basically, you make the customer buy insurance against the ruble losing value against the dollar. It's like charging a subprime borrower PMI.
    • achamayou 12y ago
      But you still need to find someone willing to sell you (enough of) the swaps in question. And that may not be easy.
  • CamperBob2 12y ago
    That presumes they have some idea of the short-term forward volatility of the rubble My guess is that your typo isn't too far from the truth. Everything we've seen lately with regard to falling oil prices is geared towards attacking the Putin regime. Eventually the Russian people will find themselves living in a North Korean-style pariah state... or else they'll wake up and take drastic action to keep that from happening. Either way the medium-term outlook for the ruble is pretty much toast.