Originally Posted by
tmiw
Non EU cards aren't subject to the interchange caps, are they? DCC may be a way for some merchants to recoup their costs, albeit anti-consumer.
Correct, the cap only applies to EU (well, EEA technically) cards.
Originally Posted by
tmiw
I'm not sure if they're even allowed to block foreign cards by law. I imagine we'd have seen more outright blocks if that were the case.
It's probably not illegal, but it's almost certainly against the terms of their agreement with Visa and MC. I've seen what appears to be that sort of block with some 3rd-party online payment processors in the Benelux; twice in the last week when trying to use American cards online the processor sent me to VBV, I verified the transaction, and then the processor declined it. In both cases a German card worked fine. My guess is that the processors justify this as a fraud-prevention measure since both online retailers are ones that don't ship outside Europe. Blocking foreign cards in person seems much less justifiable, and the only instance I've seen are some UK unattended fuel pumps, which won't even take other EU countries' cards (I'm not counting situations where only a national-network card is accepted like EC in Germany).
The recent EU directive banning card fees to consumers also carved out foreign cards. Some of the outfits that used to charge card fees until they got slapped by the EU maintained them for foreign cards--if you book a KLM flight with a European credit card, they obey the law and charge zero, but they get a couple percent if you use an American card. Interestingly I booked a couple SN flights the other day and it asked me for the first 6 digits of my card to calculate the fee... and then charged zero for an American card.