Dynamic Currency Conversion (DCC) [2014-2016]

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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 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:

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Old Apr 9, 14, 11:00 am
  #196  
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Originally Posted by Newark7 View Post
I had a problem with this recently at the Hotel Novotel Paris Gare Montparnasse. They swiped my Visa card and immediately a CC signature slip printed out with the amount in USD & fine print at the bottom saying I've been offered a choice of currencies & agree to their exchange rate + 3%. I told the hotel clerk to cancel the charge and start again and only charge in Euros. She said it automatically came up in USD and there was no option to decline. She refunded the amount in Euros, but didn't refund the 3% exchange rate upcharge, so my CC statement showed a total refund of a lesser amount.
The original charge - the lack of USD refund (void charge) sounds like my experiences at Gallaries Lafayette (Montparnesse too) and Harrods Knightsbridge.

Surprised the clerk can key in your card but probably cos its a hotel she took your payment as if it's a phone booking - many other merchants won't be able to do that.

I won't bother complaining to Accor - just like writing to /dev/null or Zhongnanhai.
I'd chargeback them to get even - both the original rort charge and the improperly-handled refund. i will make it very clear to the bank that I'm not seeking a handout from them, but paperwork grief from Accor.
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Old Apr 9, 14, 12:25 pm
  #197  
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We went to coyote in wanchai again last night. Their staff is every bit as clueless about dcc as they were last year.
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Old Apr 9, 14, 1:50 pm
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Originally Posted by percysmith View Post
The original charge - the lack of USD refund (void charge) sounds like my experiences at Gallaries Lafayette (Montparnesse too) and Harrods Knightsbridge.

Surprised the clerk can key in your card but probably cos its a hotel she took your payment as if it's a phone booking - many other merchants won't be able to do that.

I won't bother complaining to Accor - just like writing to /dev/null or Zhongnanhai.
I'd chargeback them to get even - both the original rort charge and the improperly-handled refund. i will make it very clear to the bank that I'm not seeking a handout from them, but paperwork grief from Accor.
Yeah, I called Capital One & they did a "courtesy" refund of the difference, so I should now be square as far as the DCC refund goes, but I would have rather had the hotel take the hit instead. I agree that trying to bring this issue up to Accor will only bring up a deer-in-the-headlights response or a staged language barrier issue. At least now I know to preemptively tell Accor/Novotel-branded hotel clerks to charge in Euros only, as I have heard this is an ongoing problem with this hotel brand.

P.S. I have purchased from Harrods' Gatwick & Heathrow airport stores & they always gave me a choice to pay in USD or GBP (I always paid in GBP). I don't think I've ever bought anything from their Knightsbridge store though.
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Old Apr 9, 14, 2:15 pm
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Originally Posted by percysmith View Post
The original charge - the lack of USD refund (void charge) sounds like my experiences at Gallaries Lafayette (Montparnesse too) and Harrods Knightsbridge.

Surprised the clerk can key in your card but probably cos its a hotel she took your payment as if it's a phone booking - many other merchants won't be able to do that.

I won't bother complaining to Accor - just like writing to /dev/null or Zhongnanhai.
I'd chargeback them to get even - both the original rort charge and the improperly-handled refund. i will make it very clear to the bank that I'm not seeking a handout from them, but paperwork grief from Accor.
Actually you can key the card number in on an emv terminal like you can on any us terminal. You just type it in when it says insert, swipe or tap card. It's just some merchants will refuse to key the card. I've had to do it once or twice when a card wouldn't swipe and then do a manual imprint (apart from Amex where the 4 digit code is good enough to prevent chargeback).
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Old Apr 9, 14, 3:06 pm
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Originally Posted by Newark7 View Post
I had a problem with this recently at the Hotel Novotel Paris Gare Montparnasse. They swiped my Visa card and immediately a CC signature slip printed out with the amount in USD & fine print at the bottom saying I've been offered a choice of currencies & agree to their exchange rate + 3%. I told the hotel clerk to cancel the charge and start again and only charge in Euros. She said it automatically came up in USD and there was no option to decline. She refunded the amount in Euros, but didn't refund the 3% exchange rate upcharge, so my CC statement showed a total refund of a lesser amount. When she manually keyed in my CC number instead of swiping it (on the second attempt) the signature slip came out in Euros. So it seems that swiping vs keying in the number can make a difference in regards to being charged a DCC or not (at least at Novotel branded hotels).
Purely and simply, she is a liar. Period. At some point in the transaction, she was asked whether you wished to pay in euro or in US dollars and to press the appropriate button. Also, every charge has to have provision to be voided....not credited. I don't care what they say. They are liars almost crooks when they say that (although perhaps they are simply students trying to pick up an extra euro or two). Every terminal has to have provision to void a transaction as honest mistakes do sometimes occur (you know entering 532 euro instead of 5.32 euro, the finger accidentally (note no quotation marks) off the decimal point as the amount was entered. Of course, many pos terminals print the amount off the cash register and the clerk does not enter the amount yada yada yada. There is no way in the world the clerk couldn't have voided the transaction.
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Old Apr 9, 14, 6:14 pm
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Originally Posted by JEFFJAGUAR View Post
Purely and simply, she is a liar. Period. At some point in the transaction, she was asked whether you wished to pay in euro or in US dollars and to press the appropriate button. Also, every charge has to have provision to be voided....not credited. I don't care what they say. They are liars almost crooks when they say that (although perhaps they are simply students trying to pick up an extra euro or two). Every terminal has to have provision to void a transaction as honest mistakes do sometimes occur (you know entering 532 euro instead of 5.32 euro, the finger accidentally (note no quotation marks) off the decimal point as the amount was entered. Of course, many pos terminals print the amount off the cash register and the clerk does not enter the amount yada yada yada. There is no way in the world the clerk couldn't have voided the transaction.
Surprisingly this was the only place in France I got DCC'd. All the restaurants and tourist/souvenir shops charged me in EUR without any prompting. Spain is another matter, though. The merchants & hotels are very sketchy with the DCC & pretend it's automatic, while playing dumb when you try to get if fixed.
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Old Apr 9, 14, 6:26 pm
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Originally Posted by Newark7 View Post
Surprisingly this was the only place in France I got DCC'd. All the restaurants and tourist/souvenir shops charged me in EUR without any prompting. Spain is another matter, though. The merchants & hotels are very sketchy with the DCC & pretend it's automatic, while playing dumb when you try to get if fixed.
I watched very closely last June when checking out of my hotel in Barcelona before a cruise. I got the bill. I handed over my credit card. It was inserted in the pos (it was a c&s B of A rewards card with no ftf). The first thing that happened is a slip came out of the terminal. I am 100% sure that slip had the amount in USD. But I had said right from the start I want to be billed in euro and indeed I was. About 2 years ago, in a story I related, I ran into a problem at a Burger King in Ireland and finally had to submit when the manager, some student from some Eastern European country gave me the bs answer that she doesn't need permission to convert the currency in Ireland. No sense carrying on. I did the circling the euro amount and wrote local currency not offered and had to fight it through the bank (no they didn't charge it back as I wished they would have, they credited me for the 48¢ difference, too bad). In any event, while I didn't realize it at the time, a slip came out of the pos just after the card was swiped (no emv at that time). That first slip seems to be one way the processor initiates a transaction they hope will be a decc ripping off the consumer.

But as I said, the one thing I will not do is pay cash to avoid dcc. If they don't want to do the right thing, I will fight these crooks through my bank.
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Old Apr 9, 14, 7:25 pm
  #203  
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But then again I will probably take any handouts from the issuer bank, even though I will prefer they played out the full chargeback more. At least if they have to do enough handouts they may do something about the DCC processors.
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Old Apr 9, 14, 8:43 pm
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Originally Posted by JEFFJAGUAR View Post
I watched very closely last June when checking out of my hotel in Barcelona before a cruise. I got the bill. I handed over my credit card. It was inserted in the pos (it was a c&s B of A rewards card with no ftf). The first thing that happened is a slip came out of the terminal. I am 100% sure that slip had the amount in USD. But I had said right from the start I want to be billed in euro and indeed I was. About 2 years ago, in a story I related, I ran into a problem at a Burger King in Ireland and finally had to submit when the manager, some student from some Eastern European country gave me the bs answer that she doesn't need permission to convert the currency in Ireland. No sense carrying on. I did the circling the euro amount and wrote local currency not offered and had to fight it through the bank (no they didn't charge it back as I wished they would have, they credited me for the 48¢ difference, too bad). In any event, while I didn't realize it at the time, a slip came out of the pos just after the card was swiped (no emv at that time). That first slip seems to be one way the processor initiates a transaction they hope will be a decc ripping off the consumer.

But as I said, the one thing I will not do is pay cash to avoid dcc. If they don't want to do the right thing, I will fight these crooks through my bank.
Ireland seems to be one of the countries with the most horror stories regarding American credit cards, DCC, etc. Presumably, this is because of their proximity to the UK along with large numbers of American tourists making DCC from £/$ extremely lucrative.
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Old Apr 9, 14, 8:56 pm
  #205  
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Errr alexmt Ireland is in the Eurozone but UK still has the pound sterling?

I thought it was more to do with investment-friendly policies and lax regulations.
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Old Apr 10, 14, 5:09 pm
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Originally Posted by alexmt View Post
Ireland seems to be one of the countries with the most horror stories regarding American credit cards, DCC, etc. Presumably, this is because of their proximity to the UK along with large numbers of American tourists making DCC from £/$ extremely lucrative.
Indeed Ireland was the birthplace of this scam. However, I have found that for the most part in Ireland these days, they ask before doing it. But at least in Ireland, there is not all that much of a language probleml It's when it happens in Spain or in Italy where suddenly one of the lies thrown out when merchants are questioned is, "No speak English."
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Old Apr 10, 14, 7:23 pm
  #207  
 
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then people from UK would be having the most problems, right? it's like a ferry away, using CC means paying 3% more.
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Old Apr 11, 14, 6:21 am
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Originally Posted by zyxlsy View Post
then people from UK would be having the most problems, right? it's like a ferry away, using CC means paying 3% more.
Probably worse for people who live in Northern Ireland, who will often cross the border.
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Old Apr 11, 14, 12:26 pm
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Originally Posted by percysmith View Post
Errr alexmt Ireland is in the Eurozone but UK still has the pound sterling?

I thought it was more to do with investment-friendly policies and lax regulations.
No, Ireland hasn't used the pound Sterling since independence, or close to it at least, the Irish pound ("punt") before the euro wasn't the same thing, at all.

Thus why I said, its proximity to the UK and its large number of American travellers must make converting from £/$ at extremely poor rates a very lucrative scam. Given the number of people with £/$-denominated cards shopping in Ireland.
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Old Apr 11, 14, 3:01 pm
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Originally Posted by alexmt View Post
No, Ireland hasn't used the pound Sterling since independence, or close to it at least, the Irish pound ("punt") before the euro wasn't the same thing, at all.

Thus why I said, its proximity to the UK and its large number of American travellers must make converting from £/$ at extremely poor rates a very lucrative scam. Given the number of people with £/$-denominated cards shopping in Ireland.
Actually, that is not really quite true. The first time I visited the Repblic of Ireland was around 1972 or thereabout just after decimalization. The Irish currency, still called the pound was pegged at par with the British pound (and yes I know what I'm talking about, I'm not talking about Northern Ireland, I[m talking about Ireland like in Dublin). British coins and Irish coins were interchangeable. Sometime in the middle 70's I believe although don't hold me to that, the Irish untied their currency from the British currency and so was born the punt. That remained the currency of the Republic till the euro came along.

As far as DCC, at first it wasn't electronic. Irish merchants maintained credit card accounts with banks denominated in US dollars. They had to sets of imprinters with difference account numbers and different credit card slips. For the most part they asked and ran the charge with the appropriate slip. I'm not sure if they pulled DCC on British tourists in the Republic.

Credit card processors caught the drift but it wasn't until sometime in the 90's that today electronic system began to appear allowing merchants to perform DCC in whatever currency their processor allowed. The processor was able to have the charge enter the appropriate currency credit card system after the conversion point while paying the merchant in punts and doing the conversions. That is the norm today as I understand it.
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