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Dynamic Currency Conversion (DCC) [2014-2016]

Old Jan 18, 2014, 11:10 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 Apr 11, 2014, 3:16 pm
  #211  
 
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Originally Posted by JEFFJAGUAR
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."
To be fair, English is not the most used language in the world. Only 5.43% of the world can speak English, compared to Chinese Mandarin (14.4%) and Spanish (6.15%)

http://en.wikipedia.org/wiki/List_of...ative_speakers

So it could very well be likely that the merchant could actually not speak English, especially if said merchant is in a non-touristy part of Spain where they are less likely to see English speaking tourists.

At least Spain would be a cinch for many Americans as many have taken Spanish as their second foreign language requirement in high school (I would've chosen Chinese but it wasn't offered at my school ). "No dolares, en euro por favor!"
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Old Apr 11, 2014, 3:40 pm
  #212  
 
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Originally Posted by kebosabi
To be fair, English is not the most used language in the world. Only 5.43% of the world can speak English, compared to Chinese Mandarin (14.4%) and Spanish (6.15%)

http://en.wikipedia.org/wiki/List_of...ative_speakers

So it could very well be likely that the merchant could actually not speak English, especially if said merchant is in a non-touristy part of Spain where they are less likely to see English speaking tourists.

At least Spain would be a cinch for many Americans as many have taken Spanish as their second foreign language requirement in high school (I would've chosen Chinese but it wasn't offered at my school ). "No dolares, en euro por favor!"
I won't argue with you and it probably is Chinese given the population of the country. But there's one word missing from your premise. And that is naitive like naitive language. I haven't looked at the Wikipedia article but I would wager my usual nickel that English is the #1 choice throughout most of the non English speaking world for choosing a second language to learn first. And there are many countries, Holland for example, where the study of English is almost mandatory in grade school. Don't most people in Japan choose English as their second language, first foreign, to learn? How about China? India? Russia?

About a decade ago, I took a tour that went through many of the Eastern European countries that had once been part of the Warsaw Pact. You know what struck me the most say in Poland. I would have thought the second language in most of the museums I visited in Warsaw would be either Russian or perhaps German. You know what it was? In every museum, every last one, the displays were always in Polish of course and in English.

Of course the clerks I refer to with the "no speak English" usually spoke perfect Englis up to the point of not doing a dcc transaction. Then suddenly there is a language problem!
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Old Apr 11, 2014, 7:39 pm
  #213  
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Originally Posted by JEFFJAGUAR
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.
Irish currency has been pegged to British currency off and on for several centuries. According to Wikipedia, the Irish pound was introduced in 1928 and was pegged at parity to sterling until 1978, when Ireland decided to join the European Exchange Rate Mechanism and the UK decided to stay out, forcing them to end the link.
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Old Apr 11, 2014, 8:43 pm
  #214  
 
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Originally Posted by JEFFJAGUAR
Don't most people in Japan choose English as their second language, first foreign, to learn?
In Japan, students have to take English classes. And, those students seeking to go to college also need to pass a language exam. Most Japanese students don't really retain enough English to come near conversational fluency, though.

(I taught English in Japan for the Japanese government years ago).
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Old Apr 11, 2014, 11:08 pm
  #215  
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Originally Posted by kebosabi
To be fair, English is not the most used language in the world. Only 5.43% of the world can speak English, compared to Chinese Mandarin (14.4%) and Spanish (6.15%)

http://en.wikipedia.org/wiki/List_of...ative_speakers
You might want to reread that wiki article. It has nothing to do with people who can speak the languages in question.
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Old Apr 12, 2014, 2:39 am
  #216  
 
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Originally Posted by cbn42
Irish currency has been pegged to British currency off and on for several centuries. According to Wikipedia, the Irish pound was introduced in 1928 and was pegged at parity to sterling until 1978, when Ireland decided to join the European Exchange Rate Mechanism and the UK decided to stay out, forcing them to end the link.
Good to know, thanks! I was born a fair bit after 1978, so my childhood memories of punts were that they were worth a lot less
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Old Apr 12, 2014, 12:26 pm
  #217  
 
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I tried to dispute a charge made in HKG duty free. Chase wouldn't process the dispute saying, "we do not control the way the merchant billed your account even though you opted to be charged in HKD."
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Old Apr 12, 2014, 12:54 pm
  #218  
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Originally Posted by audio-nut
I tried to dispute a charge made in HKG duty free. Chase wouldn't process the dispute saying, "we do not control the way the merchant billed your account even though you opted to be charged in HKD."
Ouch (糟糕)! I hope you escalate this during a slow day at work.
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Old Apr 12, 2014, 2:25 pm
  #219  
 
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Originally Posted by audio-nut
I tried to dispute a charge made in HKG duty free. Chase wouldn't process the dispute saying, "we do not control the way the merchant billed your account even though you opted to be charged in HKD."
Did you follow the suggested procedure at the duty free shop i.e. asking the transaction be voided and done properly in HK dollars and if they refused, cross out the statement on the slip given to you to sign saying you were offered the opportunity to pay in HK$, circle the amount in HK$ and write local option not offered. Then you dispute the charge as not being authorized and demand to see the signed merchant copy which they will be unable to produce. I don't see where Chase has any choice but to charge back the sale to the visa (or mastercard) system under visa or mc rules.
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Old Apr 12, 2014, 6:03 pm
  #220  
 
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Originally Posted by augustus21
In Japan, students have to take English classes. And, those students seeking to go to college also need to pass a language exam. Most Japanese students don't really retain enough English to come near conversational fluency, though.

(I taught English in Japan for the Japanese government years ago).
Yep. Every Japanese takes six years of English during middle school and high school. Of course, Japan being mainly a homogeneous society where English language use is hardly ever used in society, a vast majority of them do not retain English. Furthermore, most of the emphasis on English is learning/memorizing vocabulary and grammatical writing, but not in spoken context. And the only use of English during those six years is for only that subject course in middle school and high school. When you put it like that, "learning English and using it" is a very small fraction of everyday Japanese life. Every other subject from math to history to science, to everyday shopping and commuting, watching TV and surfing online is all done in Japanese. English doesn't get retained when 99.999% of everyday Japanese life by an average Japanese person can be done solely with Japanese.

Only those who have an interest in them or want to study abroad, or sent to an English speaking country as an expat take English seriously. In sharp contrast, here in LA, studying Spanish does have some positives because you actually could use it and practice it in the real world.

It's kinda like trigonometry and calculus over here. You study it, memorize it, and pass the AP exam so you don't have to take some of the mandatory courses in your freshman year in college, but once out in the real world working in an office environment, you never really have a need to use sin/cos/tan and derivatives and you end up forgetting them.

Originally Posted by JEFFJAGUAR
Of course the clerks I refer to with the "no speak English" usually spoke perfect Englis[h] up to the point of not doing a dcc transaction. Then suddenly there is a language problem!
Being able to speak a different language comes with repetition. A merchant or a clerk will be able to speak English "perfectly" because the vast majority of the English they've been using is repetitive. And what is repetitive in sales? "Yes, that's looks good on you," "try this," "this is a bargain," "Yes," "Thank you," "You're very welcome," etc. etc. etc. You repeat this hundreds of times for every English language speaking customer, anyone can say it in "perfect English." However, once you throw out something like credit card processing mumbo jumbo which I hardly expect minimum wage earning cashiers to know about let alone that's not in their repetitive dictionary in their head, they will blank out.

It's the same in any language sales. I go to Mexico, Turkey, or Thailand, and when the shop sellers look at me, they recognize me as a Japanese person and they immediately start speaking in "perfect" Japanese. "kore yasui yo!" "shachou-san! mite! mite!" "totemo niauyo!" etc. etc. Do I expect them to strike a full conversation with them in Japanese with regards to Mexican, Turkish, or Thai politics? No.

Don't get me wrong, there are many people in the world that can speak English very well. I've had a nice chat with a Jordanian taxi driver in Jordan who took me to the Dead Sea while I was there who spoke perfectly good English as he used to be a limo driver in NYC for 7 years. I've had an inn keeper in Kagoshima speak perfectly good English and Spanish as he spent his first 20 years living in Alberta and Peru as his father worked for a Japanese company with an office in Calgary and Lima.

But a vast majority of the people rarely do get to use English repetitively in their everyday lives. Learning a second language, isn't necessarily the same as understanding and being able to effectively communicate in that second language either. That, usually comes with repetition. Otherwise, it just gets put in waaaaay back in the head and sits somewhere in your head collecting dust.

Someone like me, who was born to Japanese parents in the US and have many Hispanic friends growing up in LA, would most likely grow up being a trilingual far better than the same Japanese person in Japan of my age, who had spent six years learning English in middle and high school, and yet having zero use of the English language in a homogeneous Japanese society.

Last edited by kebosabi; Apr 12, 2014 at 6:38 pm
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Old Apr 12, 2014, 6:59 pm
  #221  
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Encountered ATM DCC today using a Euronet ATM in Germany. Requested 200€. Presented with DCC option with an rate of 1.52 (market rate is 1.38) or about $304USD . I selected no and let ING/CapitalOne do the conversion and it came out to $278.26. $25 difference. Highway robbery.
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Old Apr 13, 2014, 6:33 am
  #222  
 
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Originally Posted by seawolf
Encountered ATM DCC today using a Euronet ATM in Germany. Requested 200. Presented with DCC option with an rate of 1.52 (market rate is 1.38) or about $304USD . I selected no and let ING/CapitalOne do the conversion and it came out to $278.26. $25 difference. Highway robbery.
I was about to ask if Euronet is a bank-independent ATM network, but decided not to be so lazy and looked it up myself. And guess what - those highway robbers are headquartered in ... Kansas! Here's a wikipedia summary article:

http://en.wikipedia.org/wiki/Euronet_Worldwide

Since Euronet (and other companies no doubt) provide outsourcing of payment processing for both ATMs and POS terminals, I wonder if some of those merchant protests that they have no control over DCC might actually be true. If Euronet gets a slice of each retail DCC transaction, and they're willing to add a 10% fee to your ATM draw, maybe they really don't give merchants a chance to control how the conversion is handled at retail POS.

Either way, I'm not paying DCC fees. I got burned once at the FRA Sheraton a few years ago, and that's the last time for that scam!
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Old Apr 13, 2014, 10:43 am
  #223  
 
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Originally Posted by othermike27
I was about to ask if Euronet is a bank-independent ATM network, but decided not to be so lazy and looked it up myself. And guess what - those highway robbers are headquartered in ... Kansas! Here's a wikipedia summary article:

http://en.wikipedia.org/wiki/Euronet_Worldwide

Since Euronet (and other companies no doubt) provide outsourcing of payment processing for both ATMs and POS terminals, I wonder if some of those merchant protests that they have no control over DCC might actually be true. If Euronet gets a slice of each retail DCC transaction, and they're willing to add a 10% fee to your ATM draw, maybe they really don't give merchants a chance to control how the conversion is handled at retail POS.

Either way, I'm not paying DCC fees. I got burned once at the FRA Sheraton a few years ago, and that's the last time for that scam!
I don't know the legal ramifications of agreements between credit card processors and the card associations (mastercard, visa, amex). In the old days as a merchant you had agreements with your bank to process your credit card transaction and then agreements with Amex, Diners etc. Then the idea of signing up with a processor came along. But I do know that the operating procedures of mc and visa prohibit the use of dcc scam without permissiion of the scamee. Therefore I do not think it is legal for them to prohibit the bypassing of DCC. Of course lots of things are illegal like not accepting any valid mc or visa whether it is emv or magnetic strip on paper and the credit card associations when you complain call the merchant and say naughty naughty and then do nothing about it. And Amex prohibits DCC. (BTW does anybody know if there is any real effort to enforce this prohibition?)
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Old Apr 13, 2014, 10:57 am
  #224  
 
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Originally Posted by JEFFJAGUAR
... And Amex prohibits DCC. (BTW does anybody know if there is any real effort to enforce this prohibition?)
A merchant cannot do DCC without the supporting fields on their POS system and processing interface. Thus nearly all ATM networks, whether ones owned by processors, MC or V, or bank-owned ones, do support DCC. the American Express processing infrastructure has no DCC capability so it is not possible to do DCC on an American Express transaction.

However, (there's always however), in some countries American Express does not handle themselves but are processed by a local entity (e.g. in Brazil there is no American Express network as such, it is Bradesco). In principle it still should be impossible to have a DCC on American Express-branded plastic in that situation, but the capability does exist in the multi-card processing systems even though it is required to be not enabled per American Express agreements. Is it possible anyway? Maybe, although I have never heard of it happening. Of course DCC is far from the only way to fleece unsuspecting consumers.
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Old Apr 13, 2014, 11:11 am
  #225  
 
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It also might be a good idea to have an official Association explanation of DCC as well as that of a Wiki. Here is Visa:

"What is dynamic currency conversion?
Dynamic Currency Conversion (DCC), also referred to as Cardholder Preferred Currency (CPC), is a service offered by merchants not Visa - in some countries when you are traveling abroad. If you choose to use the DCC service, the merchant will convert the purchase price of goods or services at the point of sale from the currency in which the price (i.e., the merchant's local currency) is displayed into another currency (i.e. your home currency) using an exchange rate that typically includes a service fee.

Here's an example of a DCC transaction:
A U.S. Visa cardholder is in Singapore and decides to purchase a box of chocolates priced at SGD 20. At checkout, the merchant offers the cardholder the option to pay in USD using a DCC service.

The merchant dynamically converts the SGD transaction amount to USD 15.80. The DCC transaction amount and transaction currency (in USD) are disclosed to the cardholder. An exchange rate of 0.79 (1 SGD = .79 USD), which includes a 2.5% mark up (over a wholesale exchange rate) and the 2.5% commission/fee/mark up are also disclosed to the cardholder.

The cardholder actively chooses DCC by checking a box on a printed receipt or pushing a button on an electronic screen and agrees to pay USD 15.80 for the box of chocolates using the exchange rate provided by the merchant that includes a 2.5% fee for the DCC service.

If you do not want to use DCC when making a purchase, then you have the right to refuse the offer and have your transaction billed in the merchant's local currency, which will then use Visa's conversion rate. If you did not agree to DCC, but see it on your bill, then you should ask your issuing bank to contest the charge."
http://usa.visa.com/personal/card-be...-rates-faq.jsp

Another crucial point left out of the Visa explanation and not clarified in the Wikipedia, although stated, is that DCC will NOT GIVE YOU THE PRICE YOU WILL BE CHARGED if your card issuer imposes a foreign transaction fee, because that fee will still be imposed with or without DCC. BEWARE!

Finally, if you encounter non-disclosed DCC, which can happen especially at some ATM locations, you can successfully protest with your card issuer. Such protests sometimes work and sometimes do not. In some locations, especially in China, merchants staff often do not know how to reject DCC. Some people, including me, have been successful in negotiating an additional discount adequate to cover the FX excess cost. That only works well if you've internet access and can calculate the typical prevailing rate using Oanda or some other. I have done that numerous times in various parts of China.
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