They want to follow the money trail to make sure you guys are not laundering money.

Speaking of BigPay. BigPay seems to be suffering a series of technical issues of late.

Not most of the case.
For my withdraw case in edinburgh i got charged additional 9.5% from base rate.
And fyi i don;t have any option to select local currency or home currency, all i did was input the value in pound sterling and i was charged additional 9.5% not including RM10 withdrawal fees from BP.

On other normal purchases, Bigpay's currency conversions were excellent.

May be you allowed Raphael's to do the conversion which was bad instead of letting Bigpay doing it?

Any way the general advise is to always use the local currency, in this case sterling, when overseas. Especially merchants.
From their website:
A: Raphaels Bank offers a service known as Dynamic Currency Conversion (DCC). This means that when an eligible card is identified as coming from outside the UK, we will offer to carry out conversion of the transaction value into the currency associated with the card. You will be presented with the applicable exchange rate and the total amount to be debited from your account. If you choose not to allow Raphaels Bank to carry out the conversion, the transaction will proceed in sterling and the conversion will be carried out by your card issuer.

Hey guys, sorry I was away for a few days We're going to release a Fair Usage Policy soon, so it'll all be cleared up. When it comes to FX and rates when withdrawing money from the ATM and all that, there's a blog post + infrographic going out either today or tomorrow that explains in details all the currency exchange mechanisms.