Originally Posted by Majuki

I don't know enough about how the payments run across the Visa/MC networks to tell what happens. If Visa/MC present the transaction in the cardholder currency to the issuer, then the 2% beyond the 1% Visa/MC rate that most banks impose is pure profit with or without DCC. Is my understanding incorrect here?

With DCC, you'd still get hit with the foreign transaction fee if your card has one, and the issuer has an interest in you accepting DCC if the card has a FTF because there would presumably be no conversion costs for the issuer. So, in a case of holding a card with a 3% FTF, the bank would get a 2% profit on all purchases made overseas and a 3% profit if you accepted DCC since Visa/MC wouldn't be tacking on a 1% conversion fee. In the case of a 0% FTF the issuer doesn't eat the 1% Visa/MC conversion fee if you accept DCC. Under this scenario, it's in the issuer's interest to have the cardholder accept DCC.

I think such an opt-in "Do not DCC" list would have to be a mechanism created by Visa and MasterCard. I think this could solve a lot of problems for all involved. For those of us who are militant about avoiding DCC and will not hesitate to force a chargeback to the merchant, we could opt-in to avoid confrontations with merchants. The issuers would stop getting calls from us and avoid a lot of paperwork. Merchants who wished to continue screwing their ignorant customers with DCC could continue to do so. Almost everybody wins. The problem of course is you'd never get the acquirers to play ball. They're currently on the take as part of the DCC scam yet they bear NO RESPONSIBILITY when a merchant is faced with a full Reason Code 76 chargeback. It's on the merchant in that case.

The only reason the merchants start accepting DCC is because the vast majority of customers are ignorant that they're getting ripped off when accepting DCC charges and far fewer go through the procedure to file a dispute with the issuing bank. I imagine an infinitesimally small percentage end up in a chargeback situation where the merchant has to deal with the mess. That's why educating everybody who's likely to encounter DCC about DCC and how to avoid DCC is essential. It's also critical to get them to follow up with their banks and dispute transactions where they got forced into DCC.