So the rebate is 75 basis points in this case, which doesn't seem too shabby to me. I'd be curious to know about the correlation between the merchant rebate and the size of the DCC spread.

0.75% of the foreign users' spending. Counting all transactions, it's more like 0.2%. It probably is a better deal for merchants in tourist areas.

Well, yeah... of course the DCC rebate only applies to DCC transactions, but I think 75 basis points is substantial enough to put to rest the argument that merchants don't benefit from DCC.

If merchants pay more to take foreign cards, and I am racking up miles and points by using my foreign cards and pay no extra, I'd feel a little guilty.

But, since the networks are just Visa and MasterCard, I'd think merchants pay the same fee to take local cards, because the networks are the same. It makes more sense for Visa and MC to charge the merchant 3 pence for a 1 pound transaction on a UK card, and also charge the merchant the same 3 pence for a 1 pound transaction on a US card, because in the end the merchant gets 1 pound from the entwork, right? Also, the networks already charge the 1% foreign transaction fee. That should cover the cost of converting currencies, right?

If the merchants pay the same fee, but take rebate for DCC transactions (making money out of it), they should be guilty.

I am particularly confident on my above-mentioned idea when local network is also Visa or MC. It should be a different story if the local network is UnionPay (I'm pretty sure its fee percentage in China is lower than Visa and MC in US, about 1% vs 2.5% or 3%?), since merchants would be forced to pay more if foreign cards are taken without DCC.

MC has such a thing as a interregional rate https://www.phoenixhecht.com/treasur...20schedule.pdf (though it appears to be lower than US issued cards - 1.69% vs 2.75%)

There are hundreds of different rates associated with various card types, and affinity cards do rank on the high end of the spectrum, but many processors mask this complexity for the merchant. 3% (the effective rate in the above example) is steep enough to cover almost all cards even at relatively low volumes (e.g. $100k per year).

What DCC does is create an extra 200-500 basis points of padding for the sell side to divvy up among themselves at the expense of the customer.

Even ATMs - Travelex is a big offender here - have gotten into the DCC game. They make it sound like the end of the world if you don't accept their "great" rate. "You can lock in this great exchange rate, but we have absolutely zero control over what happens if you don't accept it!" "Are you sure you don't want to accept this?" "Really sure?" "Completely sure?" "Alright, but you've been warned!!!!!" ... and then I end up getting a far better exchange rate than what they were trying to provide me.

Yes - I've had this at several ATMs across Europe. Total dump. I know what I've to click, but by the wording, 95% of users will click the wrong one.

Totally disgusting..

At ZRH airport, the new checkouts also have DCC by default (huge flag of customers country and sign "your own currency for best rate", tiny little "CHF" without flag to choose from) - I'm always telling them to choose Swiss Francs and trying to explain what scam DCC is in a few sentences, I've had people being genuine interesting in it (those I usually guest into the lounge whenever possible afterwards) but most seem to not care about it.

So, can I assume merchants pay the same percentage for local cards as they do for foreign cards? 3% for both usually?

Has the DCC offer been only at airports, or have you seen regular banks' ATMs offer this too? I've only seen it so far at airports, and I read the screen very carefully to make sure I didn't accept the wrong one. I know that my previous post had some hyperbole, but as you put it that it's set up so 95% of people will accept the wrong one.

At ZRH, is this an offer at the duty free shop or practically all stores within the airport? The most recent example I saw was at a duty free shop in Australia, but the checkout screen gave both flags equal size (US and Australian flag). It didn't really explain what it was, and most people would fall for the trap. I was explaining to someone just the other week who had commented, "Oh you don't even have to pay in euros anymore! I could pay in dollars. That was so cool! :cool:" That expression turned from one of happiness to righteous indignation :mad::mad::mad::mad::mad: after I explained that she had been cheated big time on the exchange rate. She also had been using a card with a 3% FTF, so she had gotten hit with that in addition to the DCC, resulting in charges 7-8% higher on everything where she had gotten DCC.

I've seen it at ATMs all across the countries, far from airports. "Annoyance" level definitely increasing, from 2-4 times of "are you really sure?" I've seen everything so far..

At ZRH, I've only seen it at the Duty Free store, where it's really annoying - and I'm sure a high percentage of travellers will fall for it.

Unfortunately, even if we give our best to educate the people, the credit card companies will probably keep on misleading 90%++ of the population..

Almost always though I saw one report on here of a terminal that switched to DCC after PIN entry. So wrong.

Perhaps my post about ATMs wasn't too much hyperbole! I remember the ATM I encountered presenting a warning type of message for those who are smart enough to decline the first attempt at DCC. It said something like "By declining this exchange rate you are subjecting yourself to the market rate, and your bank may charge fees that we can't control." Furthermore, the prompts are designed in such a way that avoiding DCC involves hitting no/cancel/decline on the left side of the screen whereas accepting DCC has language such as next/continue/yes/accept/ok on the right side of the screen. This is usually after a few prompts of hitting "yes", so the designer of this user interface already has the user getting to hit next/continue/yes/accept without thinking about it. It's absolutely sickening, and the vast majority of people fall for it and they never know they got screwed. :td:

I'm waiting for the first ATM bank to DCC without asking.

I doubt they'll do that.

With the current system they're cheating 95% of the people WITHOUT the risk of getting into any lawsuit. (which is a shame)