Here are some misconceptions that I see here:

Merchants do not sign up directly with VISA. VISA has a relationship with a local bank, the local bank then loans out the machines to the merchants for them to process VISA transactions.

Banks, "in their best interest", do not give detailed instructions to the merchants on how to use the credit card machine. At best, they give one of those "simple setup" papers which show "swipe card/insert EMV chip here," "enter amount here," "let the machine do the rest" "don't touch anything else, if you do, we're not liable for you breaking the machine and you owe us [insert inflated price] for the credit card machine that's loaned to you."

That's the extent of training merchants get. Care to guess what the default setting banks set their credit card machines loaned out to merchants are set to? DCC on.


And merchants who are especially technologically challenged (i.e. mom-and-pop gift stores) or have frontline high turnover rate minimum wage earning cashiers who really don't care since they're not making a career out of being a cashier all their life, are not going to spend the nook and cranny of figuring out the detailed concept of what DCC is, how foreign currency conversion works, etc.

Furthermore, merchants only care about getting paid in their local currency. If they punch in HKD 800, DCC rate comes out to USD 110, they still only get HKD 800 from the bank. Merchants profit nothing from DCC because from their agreement with their bank, is to get what was due in local currency.

So who do you guys think is getting that extra HKD 52 from DCC (real conversion rate HKD 800 = USD 103, DCC rate HKD 800 = USD 110, real conversion rate USD 110 = HKD 852, HKD 800 paid out to merchant, who profits the extra HKD 52)? Who do you think really wants DCC? The local bank.