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 merchants 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 14, 2015 | 1:54 am
#1591
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,961
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.
Jan 14, 2015 | 2:33 am
#1592
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,114
For example, assume that a cardholder uses a CUP/Visa co-branded card, issued by a Chinese bank, in Hong Kong to purchase an item priced in Hong Kong dollars. If the payment is processed through CUP’s network, the cardholder is charged in RMB using the exchange rate on the day of purchase. If the payment is processed through Visa’s network, the cardholder is charged in US dollars, but must settle with the issuing bank in RMB. Thus, the Visa option would entail two currency conversions, while the CUP option would involve one.
If your cardholder further selected DCC the 1.75% fee will be replaced by 4.2-4.5% DCC processor profit.
The idiotic thing was that since the cards are co-branded the cardholder can pay nil fee by selecting Unionpay directly.
If everyone was posted/converted today:
Direct charge to Unionpay: 100 HKD = 80.12 CNY http://www.unionpayintl.com/MainServ...exchangeRateEn
Charge to Mastercard: 100 HKD = 12.90 USD https://www.mastercard.com/global/cu...ion/index.html
Add 1.75% fee: 13.125 USD
Converted to CNY: 81.47 CNY http://www.boc.cn/sourcedb/whpj/enindex.html
DCC accepted: 100 HKD = 13.48 USD
Converted to CNY: 84.66 CNY
The Unionpay rate isn't exactly the best, but avoiding the 1.75% Foreign Currency Conversion Fee/4.5% DCC scalp and bank foreign exchange spread is definitely worth it.
I observe HK merchants generally offer PRC customers a choice of using the overseas card association or Unionpay without commenting on the merits of either. If I'm standing behind such a customer I will try to get him to say Unionpay as quickly as possible cos it's really the best for him and for me if he stops pondering the question.
Jan 14, 2015 | 4:11 am
#1593
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,961
I observe HK merchants generally offer PRC customers a choice of using the overseas card association or Unionpay without commenting on the merits of either. If I'm standing behind such a customer I will try to get him to say Unionpay as quickly as possible cos it's really the best for him and for me if he stops pondering the question.
Jan 14, 2015 | 2:00 pm
#1594
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: Hyatt Globalist, Marriott Titanium, Hilton Diamond, IHG Spire Ambassador, Qantas Platinum, United S
Posts: 664
Now lots of better dual-currency cards in China have no conversion fees for their Visa/MC part.
Jan 14, 2015 | 2:12 pm
#1595
FlyerTalk Evangelist
Join Date: Jan 2014
Location: San Diego, CA
Programs: GE, Marriott Platinum
Posts: 15,743
Interesting, UnionPay actually recommends using DCC in the US? (http://www.unionpayintl.com/column/e...SA/index.shtml)
Reminder: For holders of dual logo cards that cannot pay via the UnionPay network in the U.S., please select the RMB payment settled not via the UnionPay network if the merchants provide dynamic currency conversion service! It is recommended that the cardholder should carry about the UnionPay debit card and credit card to ensure the enjoyment of the various favorable treatments and services provided by the UnionPay network.
Due to the purchase limits for credit card consumption, it is recommended to use UnionPay debit cards for large luxury related transactions, as they are subject only to the limit of the balance of the card.
Due to the purchase limits for credit card consumption, it is recommended to use UnionPay debit cards for large luxury related transactions, as they are subject only to the limit of the balance of the card.
Jan 14, 2015 | 2:37 pm
#1596
Moderator: Manufactured Spending
Join Date: Jul 2011
Posts: 6,707
Who do you think pays for the $5 billion in annual credit card fraud in the US?
If it is covered by the merchant, it is included in the cost of the items you buy. If it is absorbed by the bank, it comes from the fees you pay for banking, or it reduces the amount of your rewards.
Ultimately, one way or another, you are paying for it.
If it is covered by the merchant, it is included in the cost of the items you buy. If it is absorbed by the bank, it comes from the fees you pay for banking, or it reduces the amount of your rewards.
Ultimately, one way or another, you are paying for it.
Jan 14, 2015 | 5:22 pm
#1598
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,114
Jan 14, 2015 | 6:45 pm
#1599
Join Date: Nov 2012
Posts: 3,537
Interesting, UnionPay actually recommends using DCC in the US? (http://www.unionpayintl.com/column/e...SA/index.shtml)
Jan 14, 2015 | 7:43 pm
#1600
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,114
Interesting, UnionPay actually recommends using DCC in the US? (http://www.unionpayintl.com/column/e...SA/index.shtml)
http://www.unionpayintl.com/column/z...SA/index.shtml
"如使用双标识卡，持卡人在美国无法选择银联网络支付，如商户提供动态货币转换服务（DCC），选择人民币 支付不通过银联网络结算！"
I can't get my head around it though - are the Visa/MC portion of the dual-branded cards now allowed to be denominated in RMB? I thought this was not allowed?
Jan 14, 2015 | 8:38 pm
#1601
Join Date: Nov 2012
Posts: 3,537
Err no. Literally read they are recommending dual-branded cardholders accept DCC!
http://www.unionpayintl.com/column/z...SA/index.shtml
"如使用双标识卡，持卡人在美国无法选择银联网络支付，如商户提供动态货币转换服务（DCC），选择人民币 支付不通过银联网络结算！"
I can't get my head around it though - are the Visa/MC portion of the dual-branded cards now allowed to be denominated in RMB? I thought this was not allowed?
http://www.unionpayintl.com/column/z...SA/index.shtml
"如使用双标识卡，持卡人在美国无法选择银联网络支付，如商户提供动态货币转换服务（DCC），选择人民币 支付不通过银联网络结算！"
I can't get my head around it though - are the Visa/MC portion of the dual-branded cards now allowed to be denominated in RMB? I thought this was not allowed?
Jan 15, 2015 | 1:02 am
#1602
Join Date: Mar 2007
Location: Seat 21C on UA
Posts: 988
Got DCC'd in urumqi at the mercure. Asked to pay cash at checkin but they had charged my card the day before I arrived. Sure enough it DCC'd and I complained at checkout. Guy didn't want to bother the manager at 7am (5am local unofficially). Finally managed to get him to take 25% off my dinner from last night. He would 't even comp the meal. Cheapo.
Jan 15, 2015 | 1:24 am
#1603
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,114
Not the first time it happened http://www.flyertalk.com/forum/europ...l#post20829662 .
These generally happen when you book with the hotel direct. The hotel makes you submit your card info online but doesn't charge until a day or two before you check in. A card-not-present charge is then made in the hotel's back office to your card and you're at the hotel's/hotel's acquirer mercy as to whether you will be DCCed or not.
Hotel is meant to get you to agree in writing http://usa.visa.com/download/merchan...n.pdf#page=530 . However I doubt those hotels have read the VIOR or thinks it applies to them - again opt-in and make you work to claw it back.
I haven't tried reversing this in the Hong Kong issuer environment where the burden of proof is (unfairly) placed on the cardholder but I guess keeping a lot of printouts on the agreed (foreign currency) rate with the absence of a DCC opt-in may help.
Of course someone will quip "use Amex la" but that's just shooting myself in the foot to avoid the DCC merchant shooting me isn't it?
---
Paying by an online hotel aggregator will avoid this.
Also I was expecting to get into similar trouble as HGHUA at the Westin Nanshan over 1 January prepaid rate but to my delight when I checked in the receptionist said "we haven't charged your card yet" and allowed me to change the card I wanted to charge and opt out of DCC.
Jan 15, 2015 | 2:55 am
#1604
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,961
January 2015: Second HK Stopover
I made three credit card purchases.
1. le Relais de l'Entrecte Hong Kong
Both percysmith and I had wanted to try out a foreign card at this restaurant to test DCC. The acquirer appeared to be First Data based on a previous meal at the restaurant, but when we got the carbon copy bill we saw that it was printed on anonymous coward paper. I ticked HKD and signed. We then both asked 1) what post signature input was entered into the POS terminal and 2) if we could get a reprint of the receipt to show HKD. The cashier obliged, and DCC was averted:
DCC Offer: $122.18
DCC Markup: 4.20%
Posted Amount: $117.26
Amount Saved: $4.92
2. Francfranc at iSQUARE in Tsim Sha Tsui
I had already purchased from this store before, so I know that they honor DCC wishes as long as you specify. (I saw someone succumb to DCC right before me, but there was a language barrier.)
DCC Offer: $230.23
DCC Markup: 4.90%
Posted Amount: $219.28
Amount Saved: $10.95
3. Courtyard Hong Kong
This place is curious because I have never seen DCC, even for the preauthorzation charge. (The front desk bills in HKD and uses a Bank of China POS terminal.) I don't know if DCC is opt-in at this hotel, but I'm not about to find out. I reiterated HKD at checkout and signed a receipt without seeing the DCC verbiage, so I don't know what the markup is:
Amount saved by opting out of DCC: $15.87
I made three credit card purchases.
1. le Relais de l'Entrecte Hong Kong
Both percysmith and I had wanted to try out a foreign card at this restaurant to test DCC. The acquirer appeared to be First Data based on a previous meal at the restaurant, but when we got the carbon copy bill we saw that it was printed on anonymous coward paper. I ticked HKD and signed. We then both asked 1) what post signature input was entered into the POS terminal and 2) if we could get a reprint of the receipt to show HKD. The cashier obliged, and DCC was averted:
DCC Offer: $122.18
DCC Markup: 4.20%
Posted Amount: $117.26
Amount Saved: $4.92
2. Francfranc at iSQUARE in Tsim Sha Tsui
I had already purchased from this store before, so I know that they honor DCC wishes as long as you specify. (I saw someone succumb to DCC right before me, but there was a language barrier.)
DCC Offer: $230.23
DCC Markup: 4.90%
Posted Amount: $219.28
Amount Saved: $10.95
3. Courtyard Hong Kong
This place is curious because I have never seen DCC, even for the preauthorzation charge. (The front desk bills in HKD and uses a Bank of China POS terminal.) I don't know if DCC is opt-in at this hotel, but I'm not about to find out. I reiterated HKD at checkout and signed a receipt without seeing the DCC verbiage, so I don't know what the markup is:
Amount saved by opting out of DCC: $15.87
Jan 15, 2015 | 3:43 am
#1605
Join Date: May 2009
Location: SIN (with a bit of ZRH sprinkled in)
Programs: KrisFlyer Gold
Posts: 9,605
Ha! We finally found a case where DCC was saving you 25% 
Anyone which got DCC scammed in the last days in Switzerland (and the regular conversation was only due today or later) saved 30% on currency exchange, as the SNB just stopped their 1.20 rate and the CHF gained 30% against all currencies.
So, any foreigners who bough stuff at ZRH yesterday and got scammed - you didn't. You scammed back
Anyone which got DCC scammed in the last days in Switzerland (and the regular conversation was only due today or later) saved 30% on currency exchange, as the SNB just stopped their 1.20 rate and the CHF gained 30% against all currencies.
So, any foreigners who bough stuff at ZRH yesterday and got scammed - you didn't. You scammed back