Table of Contents
- Navigating Currency Fluctuations: A Guide to International Transaction fees for Colombian Travelers
Holy Week Travel boom: A Financial Checklist for Colombians Abroad
As Colombia anticipates a surge in both inbound and outbound tourism during Holy Week, manny Colombians venturing abroad face potential financial surprises upon reviewing their bank statements. The fluctuating exchange rate can significantly impact the final cost of international purchases. This guide breaks down how major Colombian banks handle international transactions, empowering travelers to make informed financial decisions.
Understanding Exchange Rate Dynamics and International Purchases
The core issue lies in how banks convert foreign currency transactions into Colombian pesos (COP). The “TRM” (Tasa Representativa del Mercado), or representative market rate, plays a crucial role, but its application varies across different financial institutions and credit card networks. Understanding these nuances is key to avoiding unexpected charges.
Bank-by-Bank Breakdown: Decoding International Transaction Policies
Bancolombia: Franchise-Dependent Conversions
Bancolombia, Colombia’s largest bank, employs a franchise-dependent system. Visa transactions are converted to Colombian pesos using the TRM on the purchase date. However, Mastercard and American Express purchases are billed in US dollars. The conversion to pesos occurs only when the cardholder makes a payment, using the TRM of that payment day. This can lead to fluctuations based on currency movements between the purchase and payment dates.
Banco de bogotá and Grupo Aval: Varied Approaches
Banco de Bogotá utilizes the TRM of the purchase day to determine the final value. Other entities within the Aval Group, such as Banco de occidente and Banco Popular, operate based on the specific card franchise.
Banco de Occidente: flexibility and Potential Fluctuations
banco de Occidente allows Mastercard holders to choose between paying directly in US dollars or converting to pesos at the TRM on the payment date. As Julio Cesar Ortiz, Payment media Manager and alliances of Banco de Occidente, explains:
At the time of payment, the client can choose between two options to pay directly in dollars in the offices, or they can pay in Colombian pesos, applying the representative rate of the market to the day of the payment. This option can generate variations in the final value paid, depending on how the TRM fluctuates between the purchase and payment date.
Julio Cesar Ortiz, Payment Media Manager and alliances of Banco de Occidente
Visa transactions, conversely, are immediately converted to pesos using the TRM of the purchase day, fixing the value from the outset.
Banco Popular: Franchise-Determined TRM
Banco Popular settles purchases using the TRM established by the card franchise on the transaction date. According to Mónica Córdoba, consumer and collection products manager:
For some franchises it is settled according to several factors, including the purchase rate, the market opening rate, the currency negotiation rate, and includes the conversion commission.
Mónica Córdoba,consumer and collection products manager,Banco Popular
Davivienda: TRM Plus Spread
Davivienda uses the TRM certified by the Bank of the republic,adding a spread (difference).The exchange rate applied is that of the day the purchase is made or when the transaction is reflected on the card.
BBVA colombia: Franchise-Driven Settlement
BBVA Colombia relies on details provided by franchises thru international networks. As stated by BBVA Colombia:
international transactions are settled with the information provided by franchises through the international tape. The bank processes the international exchange through the Batch, and the value in Colombian pesos is defined when the Franchise liquidates the operation, not at the time of purchase or when the extract is paid.
BBVA Colombia emphasizes that this system ensures accurate and transparent settlement for users.
the Surge in International Transactions: A Growing Trend
Banks have observed a significant increase in international transactions, reflecting Colombia’s growing integration with the global economy. This trend underscores the importance of understanding international transaction fees.
BBVA Colombia: A 29% Increase in Early 2025
Andrés Granados from BBVA Colombia noted:
International transactions grew 20% at the end of 2024 compared to 2023.In the first quarter of 2025, there was a growth of 29% compared to the same period of the previous year. In addition, March 2025 marked the highest volume of transfront transactions in the last 24 months, reflecting the growing adoption of international payments.
Andrés Granados, BBVA Colombia
Granados attributes this growth to digitalization and global connectivity.
Banco Popular: Steady Growth in International Billing
Banco Popular reported a 4.13% increase in international billing in the first quarter of 2025 compared to the same period last year, with the average transaction value increasing by 10.8%.
Banco de Occidente: Peak Usage During Holidays
Banco de Occidente reported that over 25% of their cards are used for international purchases during peak travel periods like Holy Week and Recess Week.
Practical Tips for Colombian Travelers
- Understand Your Bank’s Policy: Contact your bank to clarify their specific procedures for international transactions, including which exchange rate they use and when the conversion occurs.
- Consider a Travel Credit Card: Some credit cards offer benefits like no foreign transaction fees or favorable exchange rates. Research options before your trip.
- Monitor exchange Rates: Keep an eye on the TRM and be aware of potential fluctuations between your purchase and payment dates.
- Pay in Local Currency: When given the option, choose to pay in the local currency rather than Colombian pesos. This allows your bank to handle the conversion, possibly offering a better rate.
- Inform Your Bank of Travel Plans: Notify your bank of your travel dates to avoid having your card blocked due to suspected fraudulent activity.