Originally Posted by
cbn42
If it's a fixed amount, then what rate would they use? I doubt any merchant is going to find a bank that will convert foreign currency for them at a flat 10 cents without any percentage commission.
Remember that when a merchant uses DCC, their bank gets paid in a foreign currency. Visa or Mastercard does not do the conversion, which means that someone else has to do it.
This may not be stated quite clearly, so a clarification might be in order:
1. The merchants bank (acquirer) is paid their normal fees but the merchant, called "discount rate". Those fees are in the local currency of record for the merchant, normally the currency of the country in which the merchant is located. There are even arcane exceptions to that.
2. The issuers bank is always paid in the currency of record for the card that was issued, without exception.
3. All DCC does is replace the normal process for FX with one artificially established by the merchant in cooperation with their acquirer. Nothing else. The published rates for the associations do not apply in that case, but all other association and issuer fees do apply including foreign transaction fees, if any.
4. For US transactions, the largest acquirers are aggressively marketing DCC to encourage US merchant to ride the "gravy train". The prototypical US promotion to merchants might be this one, from FDR which is the largest US acquirer by far, partly with JV's with major US issuers:
https://www.firstdata.com/downloads/...version_ss.pdf