Jan 18, 2014, 10:10 pm
Last edit by: emilio911
What is it?
Dynamic Currency Conversion (DCC) is a "service" some merchants and ATM operators offer that will charge a cardholder in the native currency of the card rather than the local currency. A more complete definition and examples are available via this Wikipedia article on DCC. While sold as a convenience to cardholders traveling outside of their home country, it is a pure profit play by the merchants. You may end up paying a fee of up to 8% over the purchase price for accepting DCC. Always decline DCC and asked to be billed in the local currency!
Where will I see it?
You can be hit with DCC anywhere there is a difference between your debit or credit card's denominated currency and the currency of the location where you're trying to use the card. The most common example will be at a merchant overseas, but now some ATMs are offering the service too. While many US cardholders complain about getting tricked into accepting DCC overseas, some merchants in the US have started to use DCC as well.
What is the issue?
Unless you're the merchant or ATM operator, there isn't much benefit to using DCC. Some customers say they prefer knowing exactly how much they'll be charged in their home currency or may not know the exchange rate of the place where they are visiting. For example, if you are in Prague for two days and you don't know how much the Czech Koruna is worth relative to the US Dollar, you might feel more comfortable knowing that you're buying an item for $205.00 versus 4000 CZK. However, the real exchange rate as of January 18, 2014 would place 4000 CZK at $197.18. You just paid an extra $7.82 for the "convenience" of knowing how much you'd be charged!
DCC often charges about a 4% premium over the true exchange rate. The problems don't stop there since many US banks still charge a 3% foreign transaction fee (FTF) for purchases made outside of the US. Not only would you get hit with the $205.00 charge, you could also find yourself facing a total charge of $211.15 if your card has a 3% FTF.
This is a pure money grab from the merchants, and it's billed as an easy way to squeeze additional revenue out of the transaction. Numerous [1, 2] articles have talked about DCC duping many consumers. Discover even has a warning about being tricked into DCC when using a card abroad.
For example, this FlyerTalk member reported that Avis charged his Saudi credit card in Saudi riyals instead of USD for a car rental in Florida without his consent. This has also been a trend for hotels, particularly large chains as indicated here and here.
DCC is simply not worth it for the consumer. Unless you like paying a convenience fee of up to 5% of the total transaction just to know how much you will be billed, you should always decline DCC and ask to be billed in local currency when handing over your card.
Furthermore, it is in your interest to obtain a card that has a 0% FTF. FlyerTalk member kebosabi maintains a fairly comprehensive spreadsheet of EMV-enabled cards ideal for overseas travel, many of which offer a low or 0% FTF as a feature. There is also a wiki at FlyerGuide of various FTF of debit and credit cards.
What can I do to avoid DCC?
American Express currently does not support DCC on its network, so you are safe from DCC if using an American Express card. However, Visa and MasterCard card networks can support DCC, so be vigilant when purchasing abroad with a Visa or MasterCard branded card. There have been reports of being charged DCC with a Discover card in China [citation needed], but primarily the issue is happening with Visa and MasterCard cards.
Before handing your card to the merchant, always specify clearly that you want to be charged in the local currency and that you do not want DCC. For some transactions, you retain control of your card as you dip it into a chip reader and can view on a screen to select which currency you want to use for the transaction. Always select the local currencyto get the best exchange rate. Do not select the card's native currency!
Similarly, for ATM withdrawals, make sure you decline any kind of conversions. Some good examples of what to look for when using an ATM overseas are here and here. You're probably coming off of a long flight and fatigued, but educating yourself beforehand can save you from getting ripped off. The user interfaces on almost all of these ATMs are set up to encourage you to take the bait, and you have to be extremely vigilant not to fall for it.
If you are doing a PIN-based transaction, you should have the opportunity to review the total amount and denomination of the transaction before entering your PIN. If you are doing a signature transaction and the merchant has processed your transaction with DCC, cross out the amount and write "DCC refused" on the receipt. Do not sign the receipt, and demand that the merchant reverse the transaction and run it in the local currency. If no verification is required due to a small purchase amount, ask the merchant to reverse the charge and repeat the transaction using local currency. If all else fails, file a dispute with your card issuer when you return home. Even if it's immaterial, the banks will get the message like they did with EMV.
Some merchants will claim that their systems have to bill you in your native currency. This is a complete lie. But just like a mag stripe only card, this is battle where you have to be prepared. Don't settle for merchants claiming that "it has to be done this way" or "pay cash if you don't want this". Be prepared to walk away, and, if you must complete the transaction, write "DCC refused & merchant didn't give a choice" on the receipt and cross out the amount. Let the merchant know that you will be filing a dispute with your bank.
Disabling DCC
Disabling DCC on ANZ terminals in Australia
ANZ markets DCC as Customer Preferred Currency (CPC). Terminal operators can contact ANZ Merchant Services at 1800 039 025 to have this feature disabled. Currently, your Visa or MasterCard will be subjected to DCC if denominated in: CAD, CHF, DKK, EUR, GBP, HKD, JPY, MYR, NOK, NZD, SEK, SGD, THB, USD, or ZAR. All DCC transactions on ANZ will cause a 2.5% markup. Steps to avoid DCC:
If you see a signature slip with DCC verbiage and a checkbox indicating a currency selection, kindly ask the merchant to void the transaction. If it's a PIN-based transaction, you have an additional opportunity to cancel the transaction because it will ask for your PIN a second time. For instance, if you see "EUR 17.29 KEY PIN" refuse to enter your PIN and start again.
Disabling DCC in China
There are many reports of forced DCC in China, and there is a great thread [closed to new posts] on DCC in China on the the China Destinations forum.
Disabling DCC on Bankcomm terminals in Beijing http://www.hongkongcard.com/forum/fo...p?id=12272&p=2 #19
jair101's DCC instructions of March 2011 http://www.etveg.com/misc/DCC_China.pdf
Disabling DCC in Eurozone and UK
DCC offered in tourist traps (Harrods Knightsbridge/Galleries Lafayette Montparnesse/El Cortes Ingles Grand Via Madrid)
Unlike the rest of the world, Visa Europe does not require merchants to collect a ticked box on the slip (presumably because merchants there don't keep signed slips under Chip-and-PIN)
El Cortes Ingles collects a signature electronically and the DCC selection is made on the signature pad - the choice is respected.
Harrods and GL rely on cashier input in the POS for the currency choice - the cashier may forget to ask. The POS do not offer voiding (only refunds), but since you're given a slip to sign the best thing to do is to deface it before signing and submit chargeback request to issuer bank on return home.
There may be smaller merchants who also collect DCC but I seemed to have pre-empted most of them by saying "charge Euros (Pounds) please"
In Spain all merchants by law are required to provide you with a complaint form called an hoja de reclamaciones if requested. The form has two carbon copies. The customer retains one copy as a record of the complaint. The merchant maintains another copy, and the third is sent to the local consumer protection bureau. Merchants are also required to post a sign conspicuously informing the customer of the right to complain (usually in Spanish and English). Do not accept the lie that they don't have any forms. This is illegal, and you are able to call the police if the merchant refuses to provide you with this official form. It's interesting to see merchants start to squirm when you know the rules, and most merchants will start to be accommodating after you mention it. (Please still fill out the form even if the merchant cooperates after mentioning it because these are likely the merchants who won't otherwise change their behavior.)
Disabling DCC in Hong Kong and Macau
Hong Kong and Macau can get as non-compliant as China, possibly because many acquirers have cross-border operations and know they can get away with non-compliant firmware and procedures.
In practice, if you are given a DCC slip, and the cashier has not taken a choice before giving you your copy, the slip will be processed in your home currency - be prepared to dispute.
Unable to disable Global Payments DCC in Hong Kong instance #1, instance #2
Unable to disable DBS DCC in Fortress Electronics HK
Unable to disable BoC DCC in Free Duty HK
Disabling DCC in Japan and Korea
Japan's just starting out http://www.flyertalk.com/forum/japan...ing-japan.html and http://www.hongkongcard.com/forum/fo...p?id=3939&p=17 #168 but there are no reports I know of where cardholders are compelled to use DCC against their will.
Korea is also not much affected by DCC but where offered, trying to opt out is harder than Japan due to the language barrier (both verbal and written)
http://www.hongkongcard.com/forum/fo...hp?id=4303&p=3 #23
http://www.hongkongcard.com/forum/fo...p?id=12272&p=2 #11
Disabling DCC in the Maldives
Disabling DCC on Global Payment terminals in the Maldives
Disabling DCC in Thailand and Taiwan
DCC present but generally not an issue. Cashier will generate quote slip is usually generated and pass to cardholder. When cardholder refuses, a verbage-free slip denominated in THB/TWD will be produced.
Certain Taiwan hotels may take deposits in cardholder currency. But these are only pre-authorisations and can be voided in full for TWD-only final checkout payments.
Disabling DCC on Websites
Airbnb - (Since the "loophole" seem not to work anymore, please report if you chargeback the DCC.
)
Hotwire - You need to select your preferred currency before making a search.
PayPal - The instructions to stop the DCC on a recurring charge are here.
I got duped by DCC already before I found this thread. Is there anything I can do?
If you've been hit with DCC and the merchant did not follow the Visa/MC rules, you should file a dispute with your card issuer. Even if the transaction is a small amount, it's worth it to dispute the charge on principle. Do not let merchants get away with this scam uncontested!
If you were not clearly given a choice of currencies and did not specifically communicate a preference to be billed in your card's native currency - if you did not accept DCC - then you have recourse when filing a dispute with your card issuer. The Visa Product and Service Rules clearly state (p 339):
You can even use terminology from Visa Product and Service Rules when filing the dispute, giving Reason Code 76: Incorrect Currency or Transaction Code. Reason Code 76 is used when the transaction was processed with an incorrect transaction code, or an incorrect currency code, or one of the following:
MasterCard's rules also clearly state that the POI Currency Conversion must be decided by both the merchant and customer. When filing a dispute with a MasterCard, list chargeback Reason Code 4846 from the MasterCard Chargeback Guide, which covers POI currency conversion disputes in the following circumstances:
You do have a choice of currencies. Exercise that choice!
Do not get taken by surprise when faced with DCC, and know your options. As Visa/MC purport, you do have a choice of currencies, but you need to make that choice heard! Don't be complacent in this sneaky tactic by some merchants to pad revenues.
Before going to a different country, get educated. Understand the exchange rate relative to your native currency. Know how to recognize when the merchant is trying to force DCC on the transaction, and pull out all of the stops to make sure it doesn't happen to you.
If you have a chip-and-PIN credit card, it's easier to control the transaction to try to prevent DCC. With chip-and-signature, if you get an uncooperative merchant, deface the merchant's copy of the receipt. Write LOCAL OPTION NOT OFFERED, cross out the DCC currency amount, and sign the receipt.
This will give additional evidence when filing a dispute to get the DCC charges refunded. When filing the dispute, you can use the Visa Exchange Rate Calculator or MasterCard's Currency Conversion Tool to determine the Visa or MasterCard exchange rate on the date the transaction posted to your credit card. Compare this to the DCC value to figure out the amount by which the merchant overcharged you. Don't forget to add in any Foreign Transaction Fee if your card has one. (If it does, you should really consider finding a card for use overseas without a FTF.)
Example Images (click for a larger image)
Hotel receipts in China, the Netherlands, and Dubai respectively:
Purchase receipts in China and Korea:
Cancelled translation in Hong Kong:
Novotel in Shenzen:
Dynamic Currency Conversion (DCC) is a "service" some merchants and ATM operators offer that will charge a cardholder in the native currency of the card rather than the local currency. A more complete definition and examples are available via this Wikipedia article on DCC. While sold as a convenience to cardholders traveling outside of their home country, it is a pure profit play by the merchants. You may end up paying a fee of up to 8% over the purchase price for accepting DCC. Always decline DCC and asked to be billed in the local currency!
Where will I see it?
You can be hit with DCC anywhere there is a difference between your debit or credit card's denominated currency and the currency of the location where you're trying to use the card. The most common example will be at a merchant overseas, but now some ATMs are offering the service too. While many US cardholders complain about getting tricked into accepting DCC overseas, some merchants in the US have started to use DCC as well.
What is the issue?
Unless you're the merchant or ATM operator, there isn't much benefit to using DCC. Some customers say they prefer knowing exactly how much they'll be charged in their home currency or may not know the exchange rate of the place where they are visiting. For example, if you are in Prague for two days and you don't know how much the Czech Koruna is worth relative to the US Dollar, you might feel more comfortable knowing that you're buying an item for $205.00 versus 4000 CZK. However, the real exchange rate as of January 18, 2014 would place 4000 CZK at $197.18. You just paid an extra $7.82 for the "convenience" of knowing how much you'd be charged!
DCC often charges about a 4% premium over the true exchange rate. The problems don't stop there since many US banks still charge a 3% foreign transaction fee (FTF) for purchases made outside of the US. Not only would you get hit with the $205.00 charge, you could also find yourself facing a total charge of $211.15 if your card has a 3% FTF.
This is a pure money grab from the merchants, and it's billed as an easy way to squeeze additional revenue out of the transaction. Numerous [1, 2] articles have talked about DCC duping many consumers. Discover even has a warning about being tricked into DCC when using a card abroad.
For example, this FlyerTalk member reported that Avis charged his Saudi credit card in Saudi riyals instead of USD for a car rental in Florida without his consent. This has also been a trend for hotels, particularly large chains as indicated here and here.
DCC is simply not worth it for the consumer. Unless you like paying a convenience fee of up to 5% of the total transaction just to know how much you will be billed, you should always decline DCC and ask to be billed in local currency when handing over your card.
Furthermore, it is in your interest to obtain a card that has a 0% FTF. FlyerTalk member kebosabi maintains a fairly comprehensive spreadsheet of EMV-enabled cards ideal for overseas travel, many of which offer a low or 0% FTF as a feature. There is also a wiki at FlyerGuide of various FTF of debit and credit cards.
What can I do to avoid DCC?
American Express currently does not support DCC on its network, so you are safe from DCC if using an American Express card. However, Visa and MasterCard card networks can support DCC, so be vigilant when purchasing abroad with a Visa or MasterCard branded card. There have been reports of being charged DCC with a Discover card in China [citation needed], but primarily the issue is happening with Visa and MasterCard cards.
Before handing your card to the merchant, always specify clearly that you want to be charged in the local currency and that you do not want DCC. For some transactions, you retain control of your card as you dip it into a chip reader and can view on a screen to select which currency you want to use for the transaction. Always select the local currencyto get the best exchange rate. Do not select the card's native currency!
Similarly, for ATM withdrawals, make sure you decline any kind of conversions. Some good examples of what to look for when using an ATM overseas are here and here. You're probably coming off of a long flight and fatigued, but educating yourself beforehand can save you from getting ripped off. The user interfaces on almost all of these ATMs are set up to encourage you to take the bait, and you have to be extremely vigilant not to fall for it.
If you are doing a PIN-based transaction, you should have the opportunity to review the total amount and denomination of the transaction before entering your PIN. If you are doing a signature transaction and the merchant has processed your transaction with DCC, cross out the amount and write "DCC refused" on the receipt. Do not sign the receipt, and demand that the merchant reverse the transaction and run it in the local currency. If no verification is required due to a small purchase amount, ask the merchant to reverse the charge and repeat the transaction using local currency. If all else fails, file a dispute with your card issuer when you return home. Even if it's immaterial, the banks will get the message like they did with EMV.
Some merchants will claim that their systems have to bill you in your native currency. This is a complete lie. But just like a mag stripe only card, this is battle where you have to be prepared. Don't settle for merchants claiming that "it has to be done this way" or "pay cash if you don't want this". Be prepared to walk away, and, if you must complete the transaction, write "DCC refused & merchant didn't give a choice" on the receipt and cross out the amount. Let the merchant know that you will be filing a dispute with your bank.
Disabling DCC
Disabling DCC on ANZ terminals in Australia
ANZ markets DCC as Customer Preferred Currency (CPC). Terminal operators can contact ANZ Merchant Services at 1800 039 025 to have this feature disabled. Currently, your Visa or MasterCard will be subjected to DCC if denominated in: CAD, CHF, DKK, EUR, GBP, HKD, JPY, MYR, NOK, NZD, SEK, SGD, THB, USD, or ZAR. All DCC transactions on ANZ will cause a 2.5% markup. Steps to avoid DCC:
- Insert, swipe, or tap your payment card
- Have the cashier select credit (CR)
- The terminal will display CREDIT ACCOUNT
- If applicable, enter your PIN
- The terminal will display PROCESSING \ PLEASE WAIT
- The terminal will display EXCH <exchange rate> \ <currency> <amount> \ ACCEPT RATE? \ ENTER=YES CLR=NO
- Instruct the cashier to press the yellow CLEAR (CLR) button (If entering a PIN, you can retain the terminal to perform this step yourself. If entering a signature, you can ask for the terminal to control this process, not indicating that it's a chip-and-signature card.)
- The transaction should now process without DCC
If you see a signature slip with DCC verbiage and a checkbox indicating a currency selection, kindly ask the merchant to void the transaction. If it's a PIN-based transaction, you have an additional opportunity to cancel the transaction because it will ask for your PIN a second time. For instance, if you see "EUR 17.29 KEY PIN" refuse to enter your PIN and start again.
Disabling DCC in China
There are many reports of forced DCC in China, and there is a great thread [closed to new posts] on DCC in China on the the China Destinations forum.
Disabling DCC on Bankcomm terminals in Beijing http://www.hongkongcard.com/forum/fo...p?id=12272&p=2 #19
jair101's DCC instructions of March 2011 http://www.etveg.com/misc/DCC_China.pdf
Disabling DCC in Eurozone and UK
DCC offered in tourist traps (Harrods Knightsbridge/Galleries Lafayette Montparnesse/El Cortes Ingles Grand Via Madrid)
Unlike the rest of the world, Visa Europe does not require merchants to collect a ticked box on the slip (presumably because merchants there don't keep signed slips under Chip-and-PIN)
El Cortes Ingles collects a signature electronically and the DCC selection is made on the signature pad - the choice is respected.
Harrods and GL rely on cashier input in the POS for the currency choice - the cashier may forget to ask. The POS do not offer voiding (only refunds), but since you're given a slip to sign the best thing to do is to deface it before signing and submit chargeback request to issuer bank on return home.
There may be smaller merchants who also collect DCC but I seemed to have pre-empted most of them by saying "charge Euros (Pounds) please"
In Spain all merchants by law are required to provide you with a complaint form called an hoja de reclamaciones if requested. The form has two carbon copies. The customer retains one copy as a record of the complaint. The merchant maintains another copy, and the third is sent to the local consumer protection bureau. Merchants are also required to post a sign conspicuously informing the customer of the right to complain (usually in Spanish and English). Do not accept the lie that they don't have any forms. This is illegal, and you are able to call the police if the merchant refuses to provide you with this official form. It's interesting to see merchants start to squirm when you know the rules, and most merchants will start to be accommodating after you mention it. (Please still fill out the form even if the merchant cooperates after mentioning it because these are likely the merchants who won't otherwise change their behavior.)
Disabling DCC in Hong Kong and Macau
Hong Kong and Macau can get as non-compliant as China, possibly because many acquirers have cross-border operations and know they can get away with non-compliant firmware and procedures.
In practice, if you are given a DCC slip, and the cashier has not taken a choice before giving you your copy, the slip will be processed in your home currency - be prepared to dispute.
Unable to disable Global Payments DCC in Hong Kong instance #1, instance #2
Unable to disable DBS DCC in Fortress Electronics HK
Unable to disable BoC DCC in Free Duty HK
Disabling DCC in Japan and Korea
Japan's just starting out http://www.flyertalk.com/forum/japan...ing-japan.html and http://www.hongkongcard.com/forum/fo...p?id=3939&p=17 #168 but there are no reports I know of where cardholders are compelled to use DCC against their will.
Korea is also not much affected by DCC but where offered, trying to opt out is harder than Japan due to the language barrier (both verbal and written)
http://www.hongkongcard.com/forum/fo...hp?id=4303&p=3 #23
http://www.hongkongcard.com/forum/fo...p?id=12272&p=2 #11
Disabling DCC in the Maldives
Disabling DCC on Global Payment terminals in the Maldives
Disabling DCC in Thailand and Taiwan
DCC present but generally not an issue. Cashier will generate quote slip is usually generated and pass to cardholder. When cardholder refuses, a verbage-free slip denominated in THB/TWD will be produced.
Certain Taiwan hotels may take deposits in cardholder currency. But these are only pre-authorisations and can be voided in full for TWD-only final checkout payments.
Disabling DCC on Websites
Airbnb - (Since the "loophole" seem not to work anymore, please report if you chargeback the DCC.
)Hotwire - You need to select your preferred currency before making a search.
PayPal - The instructions to stop the DCC on a recurring charge are here.
I got duped by DCC already before I found this thread. Is there anything I can do?
If you've been hit with DCC and the merchant did not follow the Visa/MC rules, you should file a dispute with your card issuer. Even if the transaction is a small amount, it's worth it to dispute the charge on principle. Do not let merchants get away with this scam uncontested!
If you were not clearly given a choice of currencies and did not specifically communicate a preference to be billed in your card's native currency - if you did not accept DCC - then you have recourse when filing a dispute with your card issuer. The Visa Product and Service Rules clearly state (p 339):
- Merchants that offer DCC must be compliant with the regulations
- Inform the cardholder that DCC is optional
- Not impose any additional requirements to use local currency
- Not use any language or procedures that may cause the cardholder to choose DCC by default
- Not convert a transaction in the local currency to the card's billing currency after the transaction has completed
- Ensure that the cardholder expressly agrees to DCC
You can even use terminology from Visa Product and Service Rules when filing the dispute, giving Reason Code 76: Incorrect Currency or Transaction Code. Reason Code 76 is used when the transaction was processed with an incorrect transaction code, or an incorrect currency code, or one of the following:
- Merchant did not deposit a transaction receipt in the country where the transaction occurred
- Cardholder was not advised that Dynamic Currency Conversion (DCC) would occur
- Cardholder was refused the choice of paying in the merchant’s local currency
- Merchant processed a credit refund and did not process a reversal or adjustment within 30 calendar days for a transaction receipt processed in error
MasterCard's rules also clearly state that the POI Currency Conversion must be decided by both the merchant and customer. When filing a dispute with a MasterCard, list chargeback Reason Code 4846 from the MasterCard Chargeback Guide, which covers POI currency conversion disputes in the following circumstances:
- The cardholder states that he or she was not given the opportunity to choose the desired currency in which the transactions was completed or did not agree to the currency of the transaction, or
- POI currency conversion took place into a currency that is not the cardholder's billing currency, or
- POI currency conversion took place when the goods or services were priced in the cardholder's billing currency, or
- POI currency conversion took place when cash was disbursed in the cardholdeer's billing currency.
You do have a choice of currencies. Exercise that choice!
Do not get taken by surprise when faced with DCC, and know your options. As Visa/MC purport, you do have a choice of currencies, but you need to make that choice heard! Don't be complacent in this sneaky tactic by some merchants to pad revenues.
Before going to a different country, get educated. Understand the exchange rate relative to your native currency. Know how to recognize when the merchant is trying to force DCC on the transaction, and pull out all of the stops to make sure it doesn't happen to you.
If you have a chip-and-PIN credit card, it's easier to control the transaction to try to prevent DCC. With chip-and-signature, if you get an uncooperative merchant, deface the merchant's copy of the receipt. Write LOCAL OPTION NOT OFFERED, cross out the DCC currency amount, and sign the receipt.
This will give additional evidence when filing a dispute to get the DCC charges refunded. When filing the dispute, you can use the Visa Exchange Rate Calculator or MasterCard's Currency Conversion Tool to determine the Visa or MasterCard exchange rate on the date the transaction posted to your credit card. Compare this to the DCC value to figure out the amount by which the merchant overcharged you. Don't forget to add in any Foreign Transaction Fee if your card has one. (If it does, you should really consider finding a card for use overseas without a FTF.
)Example Images (click for a larger image)
Hotel receipts in China, the Netherlands, and Dubai respectively:
Purchase receipts in China and Korea:
Cancelled translation in Hong Kong:
Novotel in Shenzen:
Dynamic Currency Conversion (DCC) [2014-2016]
Jan 13, 2015, 5:39 pm
#1576
FlyerTalk Evangelist
Join Date: Oct 2014
Posts: 10,904
That's like saying you are against seatbelts in cars, because if someone dies in an accident, the insurance company will say that they probably weren't wearing a seatbelt and refuse to pay, but if there was no seatbelt installed then they won't be able to make that excuse and they will need to pay out, so it's more consumer-friendly. 
If I am in an accident, a seatbelt may save my life.
Chip & PIN provides me with no benefit whatsoever.
Jan 13, 2015, 7:12 pm
#1577
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,066
Many of the small dim sum places are cash only, so DCC isn't usually a factor. I've got three DCC transactions that will post over the course of the next few days, and I'll report back.
Jan 13, 2015, 8:58 pm
#1578
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,803
That's like saying you are against seatbelts in cars, because if someone dies in an accident, the insurance company will say that they probably weren't wearing a seatbelt and refuse to pay, but if there was no seatbelt installed then they won't be able to make that excuse and they will need to pay out, so it's more consumer-friendly.
1. Transition from magstripe to chip
2. Transition from signature-based verification to PIN-based verification.
The British/EU banking industry has done a great disservice in combining the two. There is absolutely no need to - here in HK, and in PRC, Taiwan, Japan, Korea and Australia (initially) (1) has been done without moving to (2).
(1) is an improvement for everyone on the whole. It really is like the introduction of seat belts or the Polio vaccine - a technological improvement with little downside for either bank or cardholder. There may be transition problems but once in place it really does cut down fraud.
(2) as as devious as DCC. At least in British-based Bills of Exchanges jurisdictions such as UK, Australia and HK, a bad signature is the bank's problem and not the customer's. What the UK banks have done is to introduce PIN-based authentication with DCC and surreptitiously move the liability for fraud from cardholder http://en.wikipedia.org/wiki/Chip_an...s.27_liability on the basis chip authentication (which is really a separate matter as the Hong Kong experience shows) should reduce fraud.
Although PIN authentication may seem more secure than a signature to Mrs. Jones on the High Street ("no-one checks a signature" is an approving remark I heard from such a Mrs. Jones from New Zealand) this is absolutely wrong from a legal point of view. From Bills of Exchanges law which later evolved to cheque law, a bad signature will release liability from the signer (cardholder) and also imposes liability on the person accepting the signature (the merchant) to satisfy himself the signer is who he says he is.
If your card is said to have been used on a Rolex purchase transaction in Switzerland authenticated by signature you can have your liability released by proving you've never visited Switzerland at the time of transaction (a pretty easy action for us Hongkongers since we can request Immigration Department Hong Kong to release our travel records to our bank).
If the transaction was authenticated by PIN then the banks can deny liability like ATM transactions and you have to prove the bank leaked card info...
The UK belatedly reintroduced fraud liability for banks in 2009 but banks still sometimes act as if it is for the cardholder to prove his PIN has not been compromised http://www.thisismoney.co.uk/money/s...ist-banks.html
Last edited by percysmith; Jan 13, 2015 at 9:07 pm
Jan 13, 2015, 9:49 pm
#1579
FlyerTalk Evangelist
Join Date: Jan 2014
Location: San Diego, CA
Programs: GE, Marriott Platinum
Posts: 15,508
There's really two sepearate issues here:
1. Transition from magstripe to chip
2. Transition from signature-based verification to PIN-based verification.
The British/EU banking industry has done a great disservice in combining the two. There is absolutely no need to - here in HK, and in PRC, Taiwan, Japan, Korea and Australia (initially) (1) has been done without moving to (2).
(1) is an improvement for everyone on the whole. It really is like the introduction of seat belts or the Polio vaccine - a technological improvement with little downside for either bank or cardholder. There may be transition problems but once in place it really does cut down fraud.
(2) as as devious as DCC. At least in British-based Bills of Exchanges jurisdictions such as UK, Australia and HK, a bad signature is the bank's problem and not the customer's. What the UK banks have done is to introduce PIN-based authentication with DCC and surreptitiously move the liability for fraud from cardholder http://en.wikipedia.org/wiki/Chip_an...s.27_liability on the basis chip authentication (which is really a separate matter as the Hong Kong experience shows) should reduce fraud.
Although PIN authentication may seem more secure than a signature to Mrs. Jones on the High Street ("no-one checks a signature" is an approving remark I heard from such a Mrs. Jones from New Zealand) this is absolutely wrong from a legal point of view. From Bills of Exchanges law which later evolved to cheque law, a bad signature will release liability from the signer (cardholder) and also imposes liability on the person accepting the signature (the merchant) to satisfy himself the signer is who he says he is.
If your card is said to have been used on a Rolex purchase transaction in Switzerland authenticated by signature you can have your liability released by proving you've never visited Switzerland at the time of transaction (a pretty easy action for us Hongkongers since we can request Immigration Department Hong Kong to release our travel records to our bank).
If the transaction was authenticated by PIN then the banks can deny liability like ATM transactions and you have to prove the bank leaked card info...
The UK belatedly reintroduced fraud liability for banks in 2009 but banks still sometimes act as if it is for the cardholder to prove his PIN has not been compromised http://www.thisismoney.co.uk/money/s...ist-banks.html
1. Transition from magstripe to chip
2. Transition from signature-based verification to PIN-based verification.
The British/EU banking industry has done a great disservice in combining the two. There is absolutely no need to - here in HK, and in PRC, Taiwan, Japan, Korea and Australia (initially) (1) has been done without moving to (2).
(1) is an improvement for everyone on the whole. It really is like the introduction of seat belts or the Polio vaccine - a technological improvement with little downside for either bank or cardholder. There may be transition problems but once in place it really does cut down fraud.
(2) as as devious as DCC. At least in British-based Bills of Exchanges jurisdictions such as UK, Australia and HK, a bad signature is the bank's problem and not the customer's. What the UK banks have done is to introduce PIN-based authentication with DCC and surreptitiously move the liability for fraud from cardholder http://en.wikipedia.org/wiki/Chip_an...s.27_liability on the basis chip authentication (which is really a separate matter as the Hong Kong experience shows) should reduce fraud.
Although PIN authentication may seem more secure than a signature to Mrs. Jones on the High Street ("no-one checks a signature" is an approving remark I heard from such a Mrs. Jones from New Zealand) this is absolutely wrong from a legal point of view. From Bills of Exchanges law which later evolved to cheque law, a bad signature will release liability from the signer (cardholder) and also imposes liability on the person accepting the signature (the merchant) to satisfy himself the signer is who he says he is.
If your card is said to have been used on a Rolex purchase transaction in Switzerland authenticated by signature you can have your liability released by proving you've never visited Switzerland at the time of transaction (a pretty easy action for us Hongkongers since we can request Immigration Department Hong Kong to release our travel records to our bank).
If the transaction was authenticated by PIN then the banks can deny liability like ATM transactions and you have to prove the bank leaked card info...
The UK belatedly reintroduced fraud liability for banks in 2009 but banks still sometimes act as if it is for the cardholder to prove his PIN has not been compromised http://www.thisismoney.co.uk/money/s...ist-banks.html
Jan 13, 2015, 10:15 pm
#1580
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(1) is an improvement for everyone on the whole. It really is like the introduction of seat belts or the Polio vaccine - a technological improvement with little downside for either bank or cardholder. There may be transition problems but once in place it really does cut down fraud.
At best, it's neutral from my point of view. Seat belts and the polio vaccine, on the other hand, can both save my life. I don't see how you can compare the two.
Jan 13, 2015, 10:22 pm
#1581
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How does the transition from magstripe to chip help me (the carholder?). What added benefit does it provide to me?
At best, it's neutral from my point of view. Seat belts and the polio vaccine, on the other hand, can both save my life. I don't see how you can compare the two.
At best, it's neutral from my point of view. Seat belts and the polio vaccine, on the other hand, can both save my life. I don't see how you can compare the two.
Jan 13, 2015, 10:39 pm
#1582
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C&p cards will be chip read but a slip will be produced for signature. I've not been told about problems for chip and pin cards in HK.
Jan 13, 2015, 10:41 pm
#1583
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How does the transition from magstripe to chip help me (the carholder?). What added benefit does it provide to me?
At best, it's neutral from my point of view. Seat belts and the polio vaccine, on the other hand, can both save my life. I don't see how you can compare the two.
At best, it's neutral from my point of view. Seat belts and the polio vaccine, on the other hand, can both save my life. I don't see how you can compare the two.
Also my card will have to be replaced less often - "higher availability"?
Jan 13, 2015, 11:14 pm
#1584
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Interesting. The merchant acquirers there probably disabled all forms of PIN on the terminals since they probably didn't have HK-only machines built for them. Because the US is technically "chip and choice" acquirers probably aren't going to disable PIN on terminals here. Hopefully terminal positioning improves before October.
Jan 13, 2015, 11:27 pm
#1586
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Jan 13, 2015, 11:27 pm
#1587
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Actually we do collect PINs for PRC Unionpay cardholders. Although Unionpay is progressively moving to chip (their chip - "PBOC 2.0" not EMV), the majority of the cards I see brought down from the Mainland are swipe cards and the verification convention is to require both a PIN and signature.
But I don't see this being done for Visa or Mastercard cardholders from overseas. Even oreck, who used a RBC card to pay at Rainbow.
But I don't see this being done for Visa or Mastercard cardholders from overseas. Even oreck, who used a RBC card to pay at Rainbow.
Jan 13, 2015, 11:38 pm
#1588
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Not that I'm suggesting that that's what happened to you
In your case, you would absolutely not have to pay for return shipping. You can just file a chargeback since the account use was unauthorized. You are under no obligation to ship it back at your expense.
FWIW, magstripe in no way requires that stores hang onto your creit card info after you use it. They just have poor security practices. I'm sure that they will continue to have poor security practices in the future.
Jan 13, 2015, 11:58 pm
#1589
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In tmiw's case the card was used online so whether the card is chip or swipe would not have mattered. My wife had a similar experience this week http://www.hongkongcard.com/forum/fo...w.php?id=13859 but it appears the bank involved has compromised a whole bunch of card codes.
With regard to chip authenticated transactions, at least in the HK case there is still the cardholder's option to require the HK bank to prove the transaction has been authorised by cardholder. If the cardholder still possesses the card, and the travel records show the cardholder can't have travelled to the merchant, the bank is almost certainly on the hook for accepting a bad transaction. The merchant will have to prove fraud or complicity in fraud, and most will simply pay up than bother.
As with DCC, the default action/burden of proof is a significant factor. Thank goodness HK regulators are quite "reactionary" and are sticking with signatures.
Well with chip cards they can't - even better.
Jan 14, 2015, 12:28 am
#1590
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For EMV vs mag, I think EMV is harder to reproduce, and transaction details are less prone to data hacks, right?
It does not help in online transaction cases though for sure.
It does not help in online transaction cases though for sure.