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Canada AdSense Payment Currency Conversion Issues
jbayabas




msg:3775729
 1:08 pm on Oct 29, 2008 (gmt 0)

I just received my PiP. The Canadian exchange rate that Adsense set was 1.185 which is quite low. The real Canadian exchange rate in the last few days (even now) is at around 1.25.

Big difference if you earn so much from Adsense ads. EX. if you earn $4000 in adsense, your conversion will be $4720 at 1.185 rate. But if you calculate with 1.25 rate, the conversion is $5000. So you lose almost $280. That's huge!

Im surprised, AS used to have a good competitive dollar conversion rate. Now their rate is even worse than the bank!

 

nuthin




msg:3776350
 12:46 am on Oct 30, 2008 (gmt 0)

hey guy's. Same problem here in Australia. They converted it over at 67cents when the Aussie dollar was down to as low as 61 cents the day they would have sent it to us. I'm losing out about $700. I'm not really to happy about this.

Aussie: Exchange Rate 1.487 : 1 they paid us at that rate.

Bennie




msg:3776352
 12:53 am on Oct 30, 2008 (gmt 0)

Same issue here again, agree with nuthin re:exchange rate, Google?

jaztar




msg:3776356
 12:56 am on Oct 30, 2008 (gmt 0)

I'm from down under also. Here's the last good few days of the RBA rates:

22/10/2008 0.6662
23/10/2008 0.6663
24/10/2008 0.6514
27/10/2008 0.6194
28/10/2008 0.6122
29/10/2008 0.6376

Payment was issued 28th October against the rate of .6725 only?! I don't understand why the *large* variance.

Leonard0




msg:3776371
 1:47 am on Oct 30, 2008 (gmt 0)

Seems like they are using the average exchange rate for October.
Thankfully they're not using the average for September which, as LifeInAsia pointed out above, was when the money was actually earned. That would be about 1.05 vs 1.185.
It would be nice if G actually clarified how they calculated exchange rate.

gunface




msg:3776376
 2:24 am on Oct 30, 2008 (gmt 0)

Again, Google says how they calculate the rate right on the payment page:

"Payments are converted to local currency at the prevailing rate at time of payment processing."

If they are subtracting "bank fees" or whatever other crap they can come up with, they should add that info to the above sentence, no?

GeorgeK - did they give any kind of explanation for low exchange? EFT is not worth losing hundreds - I'll take the cheque and cash it myself if it's going to be like this...

GeorgeK




msg:3776382
 2:35 am on Oct 30, 2008 (gmt 0)

It's an issue of lack of transparency. In some ways, it's kind of like the stock options backdating issue, in the employee stock option world, which was a big scandal a few years ago (not saying Google or its bank is doing the same thing here, but that the same potential issue exists).

With the stock options backdating scandal, what happened was that companies would grant stock options to their employees. However, suppose the true grant date was October 1st, 2006, but it didn't get recorded until December 1st, 2006. On December 1st, 2006, the person recording it could see the price history of the stock (typically the exercise price of the option is set according to a formula, say $5 above a closing price on a certain date, for this example). Now, on October 1st, 2006, the stock might have been trading at $25/share, and thus the strike price for the options should have been set to $25+$5, i.e. $30 per share. However, between October 1st and December 1st, the stock went up and down, with say a low of $21 and a high of $33, and on December 1st was $32. The backdating scandal would involve picking out that low of $21 (say on October 17), and recording that date as the date the options were granted (at a strike price of $21+$5 = $26), instead of $30 as it should have been if October 1st was used.

Call options are more valuable if the strike price is lower, as you have the right to buy at a lower fixed price (i.e. if I have the right to buy something at $26, that's a more valuable option than the right to buy something at $30; if the stock later rises to $50, and I exercise my option I would make $24 in profit if the strike price is $26, whereas my profit is only $20 if the strike price is $30).

Academics discovered the backdating issue because certain company executives got too greedy, and picked out options grants date that statistically were highly improbable, i.e. picking out the lowest stock price of the year for 5 years in a row, etc. No one can time the market that well. This happened at many companies.

Anyhow, back to this Google exchange rate example. There's no transparency as to what specific date the payment is processed. All we observe is the PIP date (which for us was October 28, 2008, and a payment received on October 29, 2008). Suppose there really is a 7 day window, i.e. that Google might have initiated the payment as early as October 21, 2008 (or maybe even October 19, 2008, if it's 7 business days, instead of 7 calendar days). Since it's not a fixed window, i.e. it can be "up to" 7 days, the bank, or someone who wants to mislead (I'm not saying anyone did), can conceivably pay within 1 day (i.e. move funds from US Bank to Canadian EFT account). That gives them 7-1 or 6 days (business or calendar) in which they can observe the ups and downs of the currency market, and pick a rate that is most advantageous to them. The more volatile the market, the bigger the swings between highs and lows, the more opportunity will exist to find a rate on a certain day that is very different from today, and report THAT day as the exchange rate, to the person's own advantage, instead of a fair rate on the actual date the currency exchange rate took place.

How can one receiving the funds detect whether games are being played? Without transparency, one can only go back and check the rates of past Google payments, and compare those to the exchange rates over the prior 7 days, and see if there's a historical pattern, and whether that pattern has been breached. I imagine some people will be motivated to go back and do the math, as the data is all out there.

The problem is, mistakes have often been made in the past (i.e. recording 1:1 for various transactions, or using the inverse of what it should be). This seems inconceivable if the process is automated, as a computer can obviously look up the exchange rate and not make a mistake. Thus, I think most people infer there is a human element as to how the exchange rate gets recorded. Whether it's a mistake, or whether it's pure luck based on a combination of the size of the delay lining up in a certain way, and that delay being a random variable, is hard to detect.

If there was greater transparency, i.e. Google reports on October 23 "payment sent to bank, at an exchange rate of 1.185, which was the rate today at 12:32 pm Pacific time" and then we could view on that date and time what the market rates were, we'd know whether we got a fair deal. When payment was received on October 25, or October 28 or October 31st in Canadian currency, we'd know the exact amount to expect. Making the window between when the currency exchange was set and the time it was reported small (say 1 hour or less) gives no opportunity for backdating. The spot exchange rate might go up or down after October 23 at 12:32, but neither Google nor the bank can benefit from those changes, as the rate would be locked.

CJ.com apparently offers EFT to Canada in US dollars if one has a US dollar bank account with a Canadian bank (I've not tried it myself though). That would be a solution for Google if they can emulate it, if there's something preventing the transparency discussed above. Alternatively, switching to US dollar cheques would work (which is what I'm probably going to end up doing, depending on what happens in this case). I'd rather let the market go up and down and have the cheque in US dollars arrive a few days later, rather than always be wondering whether the exchange rate got calculated right by the banks, when there's so little transparency and mistakes having been made in the past.

GeorgeK




msg:3776383
 2:36 am on Oct 30, 2008 (gmt 0)

gunface: I'll ask if I can post their reply.

Swanny007




msg:3776395
 2:54 am on Oct 30, 2008 (gmt 0)

GeorgeK, the TOS of Webmasterworld will not allow you to post their reply here anyway! FYI...

stuartmcdonald




msg:3776397
 3:04 am on Oct 30, 2008 (gmt 0)

I just received a reply from Google (I contacted them asking about the almost 15 point spread on the conversions to AUD from USD). The rate diff (posted earlier, but here it is again):

Payment 28/8/2008 Exchange rate 1.165 (Oanda) 1.168 (Google)-Diff 0.003
Payment 26/9/2008 Exchange rate 1.194 (Oanda) 1.187 (Google)-Diff 0.007
Payment 28/10/2008 Exchange rate 1.634 (Oanda) 1.487 (Google)-Diff 0.147

I emailed them asking for an explanation for the discrepancy and Google came back to me very quickly. They said (paraphrased) that local currency payments are converted to the recipient currency using the prevailing market rate on the date the payment is processed.

They also waffled on about check payments -- irrelevant to my question, and also about EFT payments taking up to 7-days to appear -- not in my case -- it normally takes not more than 24 hours to hit my Westcrap account in Oz.

I've emailed them again, asking once again to explain the discrepancy -- wait and see. As it stands, they have used an incorrect exchange rate to convert US to AUD -- it is so off it even makes exchange rates offered by Oz banks look attractive -- something I thought was impossible. Given this isn't the first time this has happened, they need to fess up and make an adjusting payment asap.

GeorgeK




msg:3776408
 3:58 am on Oct 30, 2008 (gmt 0)

Thanks for pointing that out, Swanny. Perhaps Google's rep on this board might comment, instead.

GeorgeK




msg:3776428
 4:46 am on Oct 30, 2008 (gmt 0)

I started the ball rolling on an analysis of the exchange rates, using data from the Bank of Canada website from October 15, 2008 through October 28, 2008, pulled from:

[bank-banque-canada.ca...]

using Open Office. Am I allowed to link to a PDF and ODS versions of the file? (with the ODS, others can repeat the analysis for other months, to share the work)

GeorgeK




msg:3776431
 4:52 am on Oct 30, 2008 (gmt 0)

Here's the raw numeric data (CAD per $1 USD), until I get permission to link to a PDF/ODS file (which had a graph):

Date Low Noon Close High
15/10/2008 1.1610 1.1802 1.1879 1.1890
16/10/2008 1.1811 1.1952 1.1816 1.1998
17/10/2008 1.1776 1.1823 1.1869 1.1927
20/10/2008 1.1825 1.1976 1.1937 1.1982
21/10/2008 1.2023 1.2202 1.2137 1.2210
22/10/2008 1.2434 1.2499 1.2547 1.2600
23/10/2008 1.2543 1.2573 1.2557 1.2740
24/10/2008 1.2640 1.2732 1.2729 1.2796
27/10/2008 1.2777 1.2930 1.2889 1.2971
28/10/2008 1.2797 1.2943 1.2827 1.2995

PIP was October 28, 2008 (payment received the next day, Oct 29). Using the "7 days", and depending on whether it's calendar or business, one can make a decision as to whether 1.185 is reasonable. Repeating this for past months would allow us to see any patterns.

jaztar




msg:3776448
 6:00 am on Oct 30, 2008 (gmt 0)

Well, this probably explains it for us Aussies:

30/08/2008 0.6849

I didn't see that coming!

jaztar




msg:3776513
 8:40 am on Oct 30, 2008 (gmt 0)

Correction 30/10/2008

GeorgeK




msg:3776611
 11:41 am on Oct 30, 2008 (gmt 0)

jaztar: That doesn't "explain" it. Just because the US dollar weakened in the past few days, moving the exchange rate closer to what Google reported it is just chance, and was forward looking. What matters is the exchange rate on the date the actual conversion took place.

As of the time I post this, the Canadian dollar is 1.19789. However, it could have just as easily been 1.4, or 1.5. It wouldn't matter. If on the date/time of the conversion the rate was 1.28, for example, we should have received the 1.28. Any gain/loss after that date would belong to us after the rate is locked.

wheel




msg:3776886
 5:15 pm on Oct 30, 2008 (gmt 0)

Why don't folks get paid in US funds? I'm pretty sure my adsense cheque comes in US funds. I'm then free to convert it at whatever rate I'm able to get.

GeorgeK




msg:3776909
 5:41 pm on Oct 30, 2008 (gmt 0)

wheel: convenience of automatic payment directly into one's bank account was why we chose EFT.

I spoke with my own bank (Bank of Montreal) who looked at the issue, and they told me the funds came from the Bank of Nova Scotia (presumably Google has an account there?). Funds arrived on October 29th, and were posted to my account the same day.

While they couldn't say when Bank of Nova Scotia sent the funds, they found it hard to understand why it would take 7 days for funds to go between banks. Their experience is that it's 1 or 2 days (i.e. sending from Bank of Montreal to other banks). When I move money between ING Canada and Bank of Montreal, that's the time frame too. This seems consistent with the PIP, which was October 28th, the day before.

About transparency, instead of Google posting the rate they used as soon as the currency transaction is done (i.e. not this supposed 7 day potential lag), an alternative method would be to announce a formula for how the exchange rate will be set. This is done in many commercial contracts.

For example, they could say "Payments will be converted to local currency using the interbank exchange rate at 3 pm Pacific time on the sixth California Business Day before the end of each month that payment is to be received." Then, anyone could independently verify that the rate they received was fair, through Google Finance or XE.com or other currency sites. Google could perfectly hedge that, by doing spot currency transactions at that exact date and time, matching exactly the rate that they commit to. Then when payments are made a few days later, they've experienced no losses. If they instead decide not to perform that hedge, and the market moves up or down, for or against them, then it doesn't affect publishers, only themselves.

Google has Hal Varian as their Chief Economist who is highly respected in academia. Stuff like this should be fairly basic! Elegant simple solutions exist, instead of suboptimal stuff like having to switch to US dollar cheques and relying on the postal system to ensure there are no problems with future currency conversions.

stuartmcdonald




msg:3777146
 11:03 pm on Oct 30, 2008 (gmt 0)

Just got another email from Google regarding the exchange used in the USD/AUD exchange and they maintain that the rate they used on the day in question was accurate.

Not happy.

potentialgeek




msg:3777261
 4:22 am on Oct 31, 2008 (gmt 0)

> What matters is the exchange rate on the date the actual conversion took place.

Bingo.

This Google thing is starting to smell really bad. It $tink$!

p/g

GeorgeK




msg:3777439
 1:37 pm on Oct 31, 2008 (gmt 0)

I was re-reading the AdSense payments guide:

https://www.google.com/adsense/support/bin/answer.py?answer=21591&sourceid=aso&subid=ww-ww-et-asui&medium=link

and notice it says:

"Payment issued: Within the next few weeks, a Payment issued line will be posted to your Payment History page, indicating your payment has been calculated. At this time, we'll have your payment processed and sent to you."

In particular, note the last sentence and words "At this time". The payment issued date was October 28th. Then under "Payment arrives" it says "EFT payments: should arrive in your bank account within 2-4 days."

gunface




msg:3778679
 6:13 pm on Nov 2, 2008 (gmt 0)

Okay, I got a response and now I'm more confused...

They mention something about how the market rate is based on the amount of the transaction? How can that be? And that this creates an "aggregated" exchange rate?

But again, they say that it's converted from USD to local currency using the "prevailing market rate" on the date the payment is processed. In my case that's October 28th, 2008. The prevailing rate on that day is not what I received.

Anyone else hear anything more?

GeorgeK




msg:3778692
 6:32 pm on Nov 2, 2008 (gmt 0)

They said they're not going to change it. I've switched to USD cheques. I'm very disappointed.

IanCP




msg:3778803
 10:05 pm on Nov 2, 2008 (gmt 0)

Just got payment conversion to Aussie dollars and the exchange rate is just way off... I did a check at my Aussie bank exchange rate over the last two days and adsense is off by about 150 Aussie dollars...

So it wasn't just me then!

IanCP




msg:3778804
 10:06 pm on Nov 2, 2008 (gmt 0)

Just got payment conversion to Aussie dollars and the exchange rate is just way off... I did a check at my Aussie bank exchange rate over the last two days and adsense is off by about 150 Aussie dollars...

So it wasn't just me then!

stuartmcdonald




msg:3778818
 10:36 pm on Nov 2, 2008 (gmt 0)

Yeah not just you IanCP

coachm




msg:3779328
 5:29 pm on Nov 3, 2008 (gmt 0)

They mention something about how the market rate is based on the amount of the transaction? How can that be? And that this creates an "aggregated" exchange rate?

Yes, that's how it works. The rate depends on the size of the transaction. If you go to your bank and exchange 100 au/dollars, whatever, you will get a different rate than what google gets.

That's why you can't use the rate the bank is showing,because it will usually be the "best" rate.

Remember, the bank doesn't charge a fee, usually for exchanges, but makes its money from the hidden spread. They make percentage points on each exchange regardless of direction by fiddling with the rates.

My experience is that when I exchange money, I get about 3% less than the actual quoted rate, regardless of which direction I go. Theoretically google should do better.

If you couple that with the huge volatility on some days, it's conceivable that the rate you actually get will depend on the prevailing rate at the MINUTE of the exchange. Rates are varying a lot on any single day in an unprecedented way.

Don't know if that explains all the variances people are reporting.

IanCP




msg:3779485
 9:23 pm on Nov 3, 2008 (gmt 0)

Don't know if that explains all the variances people are reporting.

Hmmm not sure I agree, principally because after a great many years [30] of experience in foreign exchange transactions this one occassion it was abnormal.

I was shocked by my results [and all Australians] because the rate we were ALL given was at variance to the market on the day. This has never happened since Adsense went EFT.

Invariably in the past the rate AdSense used was always slightly more favourable than the Commonwealth Bank rate.

Too be fair AdSense employs a merchant bank in Ireland to handle all this and I think someone there got a bit cute.

penfold25




msg:3779555
 11:26 pm on Nov 3, 2008 (gmt 0)

forget this comment

ElvisFan




msg:3779695
 4:55 am on Nov 4, 2008 (gmt 0)

I agree with IanCP ... I have been with adsense for 4 years and October exchange rate was the worse on record for me... why adsense uses the Bank of Ireland to make payments to Australia is beyond me... however, that answers my question or does it?

AdSenseAdvisor




msg:3785017
 6:47 pm on Nov 12, 2008 (gmt 0)

Local currency payments get converted from USD on the day the payment is processed. The processing date may be a few days before the date printed on a check and up to 7 days before EFT funds appear in your account (due to local bank requirements).

AdSense publishers also benefit from an aggregated exchange rate because the market rate is based on the amount of the transaction. So on the day the payment is processed, the exchange rate you get is usually better than the rate you'd find by Googling it.

You can find the exchange rate used for any payment by clicking on the 'Payment' link next to the month in your account's Payment History page.

ASA

GeorgeK




msg:3785032
 7:09 pm on Nov 12, 2008 (gmt 0)

ASA: Could you advise on what exact date the most recent payments received by Canadians were "processed"? (i.e. for those receiving EFTs)

I received funds on October 29th, with PIP taking place the day before, October 28th. And from the Bank of Canada's website, the exchange rates for "up to 7 days before funds appear in your account" were:

Date Low Noon Close High
22/10/2008 1.2434 1.2499 1.2547 1.2600
23/10/2008 1.2543 1.2573 1.2557 1.2740
24/10/2008 1.2640 1.2732 1.2729 1.2796
27/10/2008 1.2777 1.2930 1.2889 1.2971
28/10/2008 1.2797 1.2943 1.2827 1.2995

Note, the rate from Google was 1.185, far below the low of any of those days. My background is finance, and I simply find it impossible to understand the 1.185 rate, given the above facts. I asked my bank how long an EFT takes in Canada (my funds were received from Bank of Nova Scotia) and they said it's usually 1 or 2 days.

This 79 message thread spans 3 pages: < < 79 ( 1 [2] 3 > >
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