a lot of crypto cards and neobanks advertise 0 FX fees
what they actually mean is that they are not *adding* any additional FX fees to the one already charged by Visa/Mastercard
to date, every crypto neobank piggybacks on the FX infrastructure provided by Visa & Mastercard
if a user has a USD card and spends in 🇧🇷Brazil, the merchant gets
$BRL and the exchange is handled by Visa
to really get 0 FX you would need to receive the so called "interbank rate" which is the rate at which banks exchange currencies between one another and what you see on online currency converters like XE
the only way to get close to this and offer a more competitive rate is to build an FX engine in-house which is what players like Revolut and Wise have done but it involves complex treasury management and operations
in a nutshell they hold pools of different currencies on their balance sheet and when a user swaps e.g USD to EUR it's just an internal swap in their treasury
they can then settle with Visa/Mastercard directly in the merchant currency and avoid the markup for the user
but to avoid the FX risk that comes with holding multiple currencies on their balance sheet they need to hedge via forward contracts and try to net flows to hold as little float as possible
this is why they mostly only offer major currencies and not the more exotic ones because the cost of hedging, ops and lack of bi-directional flows makes it too costly
and even on major currencies the 0 FX amount is capped to $1000/month for most users
i think there's a real opportunity to move FX markets on-chain and let every neobank large or small tap into wholesale liquidity
0 FX for every user worldwide with no amount caps is how crypto neobanks become significantly better than their tradfi counterparts