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Dynamic Currency Conversion (DCC) [2014-2016]

Old Jan 18, 2014, 10:10 pm
FlyerTalk Forums Expert How-Tos and Guides
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:
  1. Insert, swipe, or tap your payment card
  2. Have the cashier select credit (CR)
  3. The terminal will display CREDIT ACCOUNT
  4. If applicable, enter your PIN
  5. The terminal will display PROCESSING \ PLEASE WAIT
  6. The terminal will display EXCH <exchange rate> \ <currency> <amount> \ ACCEPT RATE? \ ENTER=YES CLR=NO
  7. 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.)
  8. 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:

Print Wikipost

Dynamic Currency Conversion (DCC) [2014-2016]

Old Aug 11, 2015, 8:49 am
  #2056  
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Can't be a PIN transaction. HK credit cardholders cannot authenticate transactions by PIN, even in a jurisdiction that can take PIN like France.
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Old Aug 11, 2015, 8:53 am
  #2057  
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Originally Posted by Points Scrounger
Did the server make those pen marks beforehand? This appears to be a PIN transaction, was this part of the "receipt"?
Not a PIN transaction, this was done with a HK credit card which can never be authenticated by PIN even if taken to a PIN-accepting jurisdiction like France.

I got the order back to front, corrected, but it shouldn't be too hard to distinguish which one was the merchant slip and which one is cardholder receipt.
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Old Aug 11, 2015, 5:53 pm
  #2058  
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Originally Posted by percysmith
It's our good friends from Global Payments
Yeah, he was hit. If the receipt doesn't say SALE OPT_O, you got hit with DCC. I would have gone ballistic.
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Old Aug 18, 2015, 4:42 am
  #2059  
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I'm at the Shanghai Brewery (Hongmei Lu location) right now, and just paid my bill.

When the DCC slip was printed, I requested a void, and was prepared to walk the waitress through the "cancel" routine during attempt #2, but during attempt #2, I saw that these new 银联 POS machines actually have a DCC (1. 是, 2. 否) step. The waitress told me that UnionPay and her manager advised her to always select option 1 because it is better for their foreign customers. In any event, the new UnionPay machines are really easy to beat if you take matters into your own hands.
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Old Aug 18, 2015, 5:52 am
  #2060  
 
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Originally Posted by moondog
I'm at the Shanghai Brewery (Hongmei Lu location) right now, and just paid my bill.

When the DCC slip was printed, I requested a void, and was prepared to walk the waitress through the "cancel" routine during attempt #2, but during attempt #2, I saw that these new 银联 POS machines actually have a DCC (1. 是, 2. 否) step. The waitress told me that UnionPay and her manager advised her to always select option 1 because it is better for their foreign customers. In any event, the new UnionPay machines are really easy to beat if you take matters into your own hands.
Really, sweet. A ray of hope of compliant machines. Now if we can just get unionpay to stop spreading lies... What bank was it?
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Old Aug 18, 2015, 8:29 am
  #2061  
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Originally Posted by HGHUA
Really, sweet. A ray of hope of compliant machines. Now if we can just get unionpay to stop spreading lies... What bank was it?
At least there is the option. After pressing 否 does a completely DCC-free slip print?
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Old Aug 18, 2015, 8:53 am
  #2062  
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Originally Posted by Majuki
At least there is the option. After pressing 否 does a completely DCC-free slip print?
Yes. There wasn't a bank name on my slip, BTW...only银联.
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Old Aug 24, 2015, 3:46 pm
  #2063  
 
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I've just finished my latest trip down to Mexico City.

The bad news: DCC has continued to spread like a very bad weed. Almost every restaurant I went to in the Polanco neighbourhood had DCC in their terminals now. From the many trips I've had to make down there over the last couple of years, I've been watching DCC grow from nothing to almost total presence in the areas of Mexico City that are popular with foreigners.

The good news: on every single occasion the servers were more than happy to cancel the option and complete the transaction in Mexican Pesos. No fight, no confusion, no problems. So even though DCC is becoming ubiquitous, the front-line staff seem quite happy to bill in Pesos and don't seem to want to trick customers into DCC.
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Old Aug 29, 2015, 9:30 pm
  #2064  
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Originally Posted by percysmith
http://www.hongkongcard.com/forum/fo...p?id=13819&p=4

Screenshot describes a thousand words. On the CNY transactions, applicable DBS HK Foreign Currency Conversion fee is 1.95% (so the applicable MasterCard rate is 1.2491, and the CNX rate is 2.545% above that).



Is CNX some sort of new institutional scam V/M is letting Chinese online merchants get away with? Anyone else have CNX currency code?
Seems like Ctrip isn't using CNX anymore http://www.hongkongcard.com/forum/fo...?id=11968&p=14 #136 (the currency rate William Lo got corresponds to normal CNY).

Last edited by percysmith; Aug 30, 2015 at 7:11 pm
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Old Aug 30, 2015, 4:39 am
  #2065  
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http://www.flyertalk.com/forum/singa...l#post25349792

Originally Posted by carrotjuice
I've been travelling to HKG rather frequently of late and noticed there's this restaurant that I dined at regularly - every time I was presented the CC slip and I ticked to be charged in HKD, I still ended up being charged in SGD via that dreadful DCC!

After a few times, I decided to 'confront' the restaurant and asked the restaurant manager how their CC chargings were done.

He actually showed me step-by-step using the CC machine... swiped the card and the machine was programmed to AUTOMATICALLY charge in the card issuing currency, regardless of what I had selected on the CC slip. There wasn't a prompt on the CC machine that gave the restaurant an ability to over-ride SGD with HKD at any time throughout the process.

I told the restaurant manager that this process was wrong. He said he would "check with his bank".

But sure enough, after I came home, I noticed that the latest restaurant bill was charged in HKD. So he did check with his bank after all, and instructed the change.

Seems that CC machines can be automatically programmed to charge in the card currency... and the merchant has to ask his acquiring bank to either revert to a prompted process or to manually over-ride a transaction to be charged in the respective local currency before it's settled.

But the challenge is... you wouldn't know whether the CC machine has been pre-programmed to convert automatically unless you actually see process happen before you... regardless of what currency choice you may tick on the CC slip!
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Old Aug 30, 2015, 11:13 am
  #2066  
 
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I bought a flight ticket from elong.net, 5644rmb should be US$880 from VISA 26aug rate, but they charged my 916usd. I called BoA and they asked "do you do business with this merchant" ? I said yes, and then they said I need to contact the merchant as it's not fraud.
How to proceed? Will elong adjust this, or do I need to speak to another department at BoA cards?
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Old Aug 30, 2015, 11:45 am
  #2067  
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Originally Posted by nick5000
I bought a flight ticket from elong.net, 5644rmb should be US$880 from VISA 26aug rate, but they charged my 916usd. I called BoA and they asked "do you do business with this merchant" ? I said yes, and then they said I need to contact the merchant as it's not fraud.
How to proceed? Will elong adjust this, or do I need to speak to another department at BoA cards?
Did an exchange rate show on your account? It seems like there was DCC with a 4% surcharge. If you get a knowledgeable person at BoA - hah! - you can resolve it quickly. If not, you need to start a chargeback process with reason code 76. The merchant will not solve this unless you file a chargeback.
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Old Aug 30, 2015, 7:46 pm
  #2068  
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Exact 4.1%, which sounds like a classic Bank of China DCC.

You can chargeback as majuki suggested, but you may compromise the elong flight booking by charging back (happened for Citi HK). Is the travel soon?

You can use the ticket, then chargeback if you are still within time frame (120 days per chargeback guide) (some banks like Citi HK purport to limit sixty days, but generally chargebacks have to be honoured within 120 days notwithstanding the banks' purported shortening of time frame).

Last edited by percysmith; Aug 30, 2015 at 7:54 pm
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Old Aug 30, 2015, 7:51 pm
  #2069  
 
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What is really provoking is that elong publish and charges a 3% fee for using foreign credit cards. So we end up pay 3% and then another 4.1% on top of that!

I can rebook the ticket again through the airline directly, so I'll try to get BoA to proceed with this, if I can't get any reply from elong today. Have been using elong for many years, but guess this is the end.
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Old Aug 30, 2015, 7:58 pm
  #2070  
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nick5000 if within 120 days I suggest you fly the ticket first, then chargeback.

Don't rebook. It makes it ambiguous whether you're actually flying or not - the airline may reject your second booking.

You can still agree you enjoyed the services in full but you were charged the wrong currency - but like me enjoying my meal at A Lorcha Macau then disputing their HKD billing http://www.flyertalk.com/forum/china...l#post17894974 .
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