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Originally Posted by
zyxlsy
The merchant wants to be credited the correct amount in local currency for the service, minus the swipe fee charged by the acquirer bank;
Ideally, merchant wants to be credited the amount of the purchase with no fee payable by him.
Originally Posted by
zyxlsy
Acquirer wants to be credited the correct amount in local currency for the transaction;
Acquirer wants to maximise profit.
It might not be able to do so by increasing fees to merchant - look what's happening to Amex.
Might be easier to scam the cardholder, to which it has no ongoing relationship. Acquirers to cardholders are as transactional as hookers.
Originally Posted by
zyxlsy
In case a no FTF card, the issuer bank is charged the appropriate amount in card currency + 1%, which it absorbs for the card holder;
Card holder is debited the appropriate amount in card currency, and the rate is shown on the statement.
No-FTF - yes, it's concessionary pricing.
Originally Posted by
zyxlsy
In this loop, the network does all the currency conversion and charges 1% for the service. Each side sees the transaction as a normal local currency transaction.
Therefore, anyone using DCC is just purely trying to rip people off, and a lot of these DCC people deceive.
Of course, that is based on the assumption that my model is accurate, which I don't have the confidence. But if I build a credit card network, it would be looking like this.
The only possible benefit DCC may bring is a choice of currency conversion is better than no choice in currency conversion.
Unfortunately I have yet to see a DCC supplier that offers a price improvement over V/MC - now DCC only exists to trap customers.
I don't think switching off DCC is practical without substantial cost to V/MC but policing them til they get run out of business may be.