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Dynamic Currency Conversion (DCC) [2014-2016]

Old Jan 18, 2014, 11:10 pm
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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 14, 2014, 9:00 am
  #241  
 
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Originally Posted by jbcarioca
I'll make wagers that the EU consumer protection policy will somehow act to constrain major networks operating in the EU from permitting DCC on EU-issued cards. Once that happens there will be more pressure on MasterCard/Visa/JCB and ATM networks to disenable the practice.
Quite the opposite, the merchant lobby is EXTREMELY powerful and good at convincing governments that it is on consumers' side (see: interchange fee regulation). I would be less surprised to see a law passed allowing FORCED DCC (in the name of protecting the consumer from the evil banks and allowing the friendly benevolent merchant to make the choice) than I would be seeing DCC banned (since that means the merchant makes less money and the evil banks get their way).

P.S. Remember Visa and Mastercard do NOT support DCC by choice, they do so because consumer protection laws (antitrust) means they have to given their huge market share, or risk an antitrust suit.

P.P.S. Here's an example for anyone who doesn't believe me that DCC is presented as being pro-consumer: http://www.law360.com/articles/41251...antitrust-suit
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Old Apr 14, 2014, 9:33 am
  #242  
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Originally Posted by JEFFJAGUAR
As far as the hotels are concerned, many have pulled the Avis trip i.e. burying in the check in document you are pressured to sign an agreement to accept dcc. If it's in England, assuming you are from an English speaking country, it is of course in a way your fault for not reading what you're signing. However in non English speaking countries, say in Italy, how many would recognize their agreeing to be billed in their own country. The solution is to write in bold letters on the check in slip, no matter what, if it's in a language you don't understand, bill in euro (or whatever the local currency is) only. Perhaps we can produce a stamp, like a date stamp with movable bands, with all the currencies. You know Bill in (select the currency) only!
For hotel-collected prepaid hotel rates, hotels don't think they need consent to DCC (they do)
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Old Apr 14, 2014, 9:42 am
  #243  
 
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Originally Posted by percysmith
Sorry I can't get my head around how automated this can be.

I'm sure even the most non-compliant terminal in Shenzhen will still send the appropriate signals saying cardholder has been given a choice, authorization is duly obtained, all is compliant etc. -

it's not like issuers distribute rsa secureid-like tokens to make sure electronically that cardholder has consciously authenticated.

So the only way to really dispute is the paper. Either:

(HK/Singapore model): cardholder practically required to furnish proof what they signed before bank will start chargeback. I did one - took six weeks http://www.flyertalk.com/forum/china...on-45.html#675 even though the restaurant is just practically an hour's boat ride from where I live (Macau is a separate Special Administrative Region, and is treated as a foreign country as far as Hong Kong is concerned)

Rest of world model?: merchant is required to present proof cardholder opted in to DCC. Issuer bank disputes the acquirer via Visanet, acquirer informs the merchant, merchant either represents the slip - has 45 days per the VIOR - or waits for the end of the representment period and debits the amount via visanet.

In both cases there is delay and review of paper. So i don't see how automated this process can get.
Actually Visanet is now TSYS. http://www.dotnetcharge.com/vital.htm It is also not exclusive. At the present time the two, MasterCard and Visa, see half or more of their brand traffic but not too much more. The data flows depend on the acquirer capabilities and mandatory data flows, almost all of which is automated in some cases and not others. Chargebacks are frequently automated while disputes may or may not be. The local standards for accepting a dispute may be cumbersome and require paper even though the acquirer is fully capable of an automated process. Such is the case for at least two major Singapore acquirers. I do not know about others.

To enter into a detailed discussion of how the automated side of this works we would need to deal with proprietary information and I'd need to retrieve proprietary documents. As a statement of fact, among people who are veterans running US-based dispute/chargeback operations many do not understand how this works and can work. After decades working around the industry i was astonished about the level of misinformation and conflicting information even among dispute/chargeback software vendors and processing vendors also.

Despite the foregoing, few ATM networks have any clear standards for disputes much less automated processes.Some major ones in some countries have no established procedures at all! The major card brands do have standards but processors can and do fail to comply with the standards. Some of the standards themselves (required notification ageing, for example) are interpreted differently by different issuers. However, some processors automate a long list of dispute categories including autochargebacks.

I do not know whether I have responded precisely to your points but I have tried to do so. From an end user perspective I know it looks as though paper is the only way, but it is not. Some issuers require paper to meet desire to reduce disputes and/or to meet local documentation requirements. FWIW, Singapore and Malaysia have both just been in the midst of major changes to card processor issuance, data management and processing legislation.
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Old Apr 14, 2014, 9:44 am
  #244  
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Originally Posted by alexmt
Chip and PIN is, of course, much better. Not perfect, there is one case in this thread of a person who entered their PIN for a local currency transaction and THEN got DCC'd.
I worry about PIN and DCC more than signature. Or even signature pads like El Cortes Ingles or Lotte for the matter.

It'll be rort paradise if banks like Bank of China will be allowed it. Their terminals aren't in any compliance program, they can be hard wired to "yes" DCC all the time. There'll be nothing for cardholders to write.

I think this is already currently permissible in Europe, so Harrods and Gallaries Lafayette are allowed to collect DCC decisions at the POS. God forbid China be allowed to join in.
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Old Apr 14, 2014, 9:54 am
  #245  
 
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Originally Posted by alexmt
Quite the opposite, the merchant lobby is EXTREMELY powerful and good at convincing governments that it is on consumers' side (see: interchange fee regulation). I would be less surprised to see a law passed allowing FORCED DCC (in the name of protecting the consumer from the evil banks and allowing the friendly benevolent merchant to make the choice) than I would be seeing DCC banned (since that means the merchant makes less money and the evil banks get their way).

P.S. Remember Visa and Mastercard do NOT support DCC by choice, they do so because consumer protection laws (antitrust) means they have to given their huge market share, or risk an antitrust suit.

P.P.S. Here's an example for anyone who doesn't believe me that DCC is presented as being pro-consumer: http://www.law360.com/articles/41251...antitrust-suit
The US merchant lobby is indeed incredibly powerful, so much so that they have delayed chip/pin for years because of the big retailer database concerns, now mostly changed. Europe is a quite different matter. The EU has already gone far to equate credit and debit interchange, admittedly a benefit to merchants but the DCC and related issues are easily visible in the EU prohibition of cross border treatment differences within the Eurozone. DCC was dreamed up in the first place by, allegedly, a Visa executive, and while usually the views of the practice seem negative by industry executives they are far from universally so. Despite the US reluctance to close any opportunity for merchant ripoff so long as it is sufficiently arcane the Brussels and ECB views are different, partly because their policies tend to be influenced by technocrats rather than politicians. The interchange processes are a clear case in point. How many politicians anywhere even know what it is? How many European large retailer CEO's do?

Obviously the potential for regulation regarding DCC is a matter of opinion, and i absolutely know people who are very knowledgable arguing both sides. I'm guessing your are one of those by your comments. i respect your opinion and do think you've made a quite plausible case, but i still think there will be EU activity in this arena. One reason is that a Brussels-based colleague of mine has recently been asked to brief some EU staffers on DCC. Does that mean anything? I do not know, but I hope so.
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Old Apr 14, 2014, 10:50 am
  #246  
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Originally Posted by jbcarioca
Actually Visanet is now TSYS. http://www.dotnetcharge.com/vital.htm It is also not exclusive. At the present time the two, MasterCard and Visa, see half or more of their brand traffic but not too much more. The data flows depend on the acquirer capabilities and mandatory data flows, almost all of which is automated in some cases and not others. Chargebacks are frequently automated while disputes may or may not be. The local standards for accepting a dispute may be cumbersome and require paper even though the acquirer is fully capable of an automated process. Such is the case for at least two major Singapore acquirers. I do not know about others.
First, let's not bring ATMs to this.

Let's just focus on what I believe my DCC rights are:

- the requirement for my checking a tick box in a card-present situation https://usa.visa.com/download/mercha...n.pdf#page=446

(with exception for Europe merchants https://usa.visa.com/download/mercha...n.pdf#page=751)

- the requirement for my express permission to apply DCC in a service agreement https://usa.visa.com/download/mercha...n.pdf#page=530

Your chargeback (if that can be segregated from dispute) mechanism may deal with 99% of errors. Those we don't even know about as consumers. I'm sure they are important in such a mass scale, multi-party system and we've been relieved of a lot of processing errors.

What we're dealing with are disputes about how we are charged. Take your SGD20 transaction - the customer ticks SGD20 but the system is hard-wired to select the cardholder's currency (USD). The Singapore merchant and acquirer send out all the necessary and correct signals to indicate cardholder agreed to USD15.80. The card is present, valid, has enough credit and a proper auth code is obtained. But the cardholder ticked SGD20. How can you "automate" this dispute?
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Old Apr 14, 2014, 11:07 am
  #247  
 
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Originally Posted by JEFFJAGUAR
Perhaps we can produce a stamp, like a date stamp with movable bands, with all the currencies. You know Bill in (select the currency) only!
Doesn't have to be movable bands. The key is portability, a keychain sized pocket stamp would be perfect than carrying a big stamp with who know what may go wrong (ink all over the place, etc.)

If that's the case, a simple "bill in ___________ only" stamp would suffice leaving you to write in the foreign currency in the blank space with your own pen after it's stamped.


Originally Posted by percysmith
What we're dealing with are disputes about how we are charged. Take your SGD20 transaction - the customer ticks SGD20 but the system is hard-wired to select the cardholder's currency (USD). The Singapore merchant and acquirer send out all the necessary and correct signals to indicate cardholder agreed to USD15.80. The card is present, valid, has enough credit and a proper auth code is obtained. But the cardholder ticked SGD20. How can you "automate" this dispute?
I know it's a long shot, but perhaps DCC can also be one option that can be automatically set by the cardholder side in the issuer database from their online account.

1. You go online to your credit card account
2. There's a DCC section with an optional tick mark that says "always decline DCC when offered"
3. Every transaction abroad then will be charged at the local currency rate rather than DCC, no matter what the POS does. The issuer's database in which the cardholder has already preset to decline all DCCs will triumph all selections done by the POS whether hardwired or pre-selected or not.

If enough cardholders complain to their banks to have them start offering this selective service within their online account, then it can be done. Just like the EMV conversion, the first bank that is able to bring this ability will gain the most saviest of all international travelers and will get a head start against their competition.

If the EMV conversion in the US has shown us something, is that competition between banks and financial institutions to gain cardholders (especially the ones who travel the most as they tend to be their best credit card customers) is still a strong part of our market economy and usually credit unions are far more friendlier to customers' needs over big name banks.

Banks already are capable of offering 0% FTF, despite that VISA and MC charges a 1% FTF on the network side. That means banks are capable of "eating up" the cost that VISA and MC charges the bank for foreign transaction fees.

Banks already are capable of doing some kind of preset authorization limitations online by the cardholder themselves, like the fact that many currently offer an online method where cardholders can enter in which countries they are visiting so as to prevent fraud monitoring to kick in while they are abroad.

Put the two and two together, I wouldn't think it would be impossible that banks can create an optional "decline DCC" tick mark online for each cardholder that is set within the issuer's servers that triumphs all POS made entries, if enough cardholders complain and write to their banks that they want this kind of service available.

Last edited by kebosabi; Apr 14, 2014 at 11:26 am
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Old Apr 14, 2014, 11:09 am
  #248  
 
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Originally Posted by percysmith
First, let's not bring ATMs to this.

Let's just focus on what I believe my DCC rights are:

- the requirement for my checking a tick box in a card-present situation https://usa.visa.com/download/mercha...n.pdf#page=446

(with exception for Europe merchants https://usa.visa.com/download/mercha...n.pdf#page=751)

- the requirement for my express permission to apply DCC in a service agreement https://usa.visa.com/download/mercha...n.pdf#page=530

Your chargeback (if that can be segregated from dispute) mechanism may deal with 99% of errors. Those we don't even know about as consumers. I'm sure they are important in such a mass scale, multi-party system and we've been relieved of a lot of processing errors.

What we're dealing with are disputes about how we are charged. Take your SGD20 transaction - the customer ticks SGD20 but the system is hard-wired to select the cardholder's currency (USD). The Singapore merchant and acquirer send out all the necessary and correct signals to indicate cardholder agreed to USD15.80. The card is present, valid, has enough credit and a proper auth code is obtained. But the cardholder ticked SGD20. How can you "automate" this dispute?
First, ATM's need to be part of the discussion because ATM DCC charges are common, especially in China and there is inadequate data tracking available to immediately identify appropriate consumer approval. Some, such as HSBC just rebate the extra charge without question when the ATM transaction took place at an HSBC location. Others are worse and a manual process is required.

In your case the dispute is over falsification of approval and/or inadequate disclosure of a non-default option, right? In such a case there is no paper to offer as proof since the only thing you might offer is a receipt that amy or may not shed any light. Assuming no regulatory requirement exists where one does this, the dispute could be filed online or by telephone, data entered or downloaded stating the facts. if there is a receipt it can be scanned and attached online or otherwise sent to the issuer. It is then attached automatically to the file also automatically generated. If you telephone an operator must select the reason code, if online there is a drop down menu that equates to a reason code selector. That file then is combined put in the required Visa/MC or other format and off it goes. the suspense dates are automatically appended as are the require ticklers and followup steps. Any required network correspondence is automatically generated even if the network does not support automation.

That is a beginning of how the automated process works. The online side can be accomplished for DCC transactions usually with no human intervention at all. However, that depended entirely on the issuer involved even if there is no local regulatory interference. For a CC transaction all the pertinent data will be auto-matched including the customer receipt, if applicable.

BTW, if the transmittal file with transaction data at the issuer shows discrepancy in required data from the merchant processor an autochargeback can and does occur if the issuer systems support such. It never is debited from the cardholder account if it fails to meet submission requirements. I do not know how many US issuers have the capability to do that but I do know some of the processors that do.
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Old Apr 14, 2014, 11:36 am
  #249  
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Originally Posted by jbcarioca
That is a beginning of how the automated process works. The online side can be accomplished for DCC transactions usually with no human intervention at all. However, that depended entirely on the issuer involved even if there is no local regulatory interference. For a CC transaction all the pertinent data will be auto-matched including the customer receipt, if applicable.
That's the be all and end all of the majority of disputes we've been concerned about here. The receipt is needed!

Yes you have a beautiful system. But garbage in garbage out - it won't work until someone files a digital copy of the receipt - the "burden of proof" will depend on where you are.

And AFAIK no bank has offerred a front-end of its file uploading process to customers and banks. What are the receipt image requirements?
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Old Apr 15, 2014, 3:08 am
  #250  
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Originally Posted by kebosabi
I know it's a long shot, but perhaps DCC can also be one option that can be automatically set by the cardholder side in the issuer database from their online account.

1. You go online to your credit card account
2. There's a DCC section with an optional tick mark that says "always decline DCC when offered"
3. Every transaction abroad then will be charged at the local currency rate rather than DCC, no matter what the POS does. The issuer's database in which the cardholder has already preset to decline all DCCs will triumph all selections done by the POS whether hardwired or pre-selected or not.

If enough cardholders complain to their banks to have them start offering this selective service within their online account, then it can be done. Just like the EMV conversion, the first bank that is able to bring this ability will gain the most saviest of all international travelers and will get a head start against their competition.
This is an intriguing idea, but what is to stop merchants from either 1) saying "sorry your card didn't work", or 2) surcharging foreign cards that don't accept DCC? The first is completely plausible in a foreign country, and the second may be a violation of the rules, but as we know, no one can do anything about it.
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Old Apr 15, 2014, 3:20 am
  #251  
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Originally Posted by kebosabi
1. You go online to your credit card account
2. There's a DCC section with an optional tick mark that says "always decline DCC when offered"
3. Every transaction abroad then will be charged at the local currency rate rather than DCC, no matter what the POS does. The issuer's database in which the cardholder has already preset to decline all DCCs will triumph all selections done by the POS whether hardwired or pre-selected or not.
Visa/Mastercard/ACCC/[merchant lobby] won't facilitate it and can easily litigate against it - can easily portray the always declined option (whether opt-in or not) "deprives consumer of a choice". Comes from the same lobbying brains who said watering down the Sarbanes Oxley provisions to prevent another Enron will create jobs.

Last edited by percysmith; Apr 15, 2014 at 3:29 am
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Old Apr 15, 2014, 4:12 am
  #252  
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Originally Posted by cbn42
This is an intriguing idea, but what is to stop merchants from either 1) saying "sorry your card didn't work", or 2) surcharging foreign cards that don't accept DCC? The first is completely plausible in a foreign country, and the second may be a violation of the rules, but as we know, no one can do anything about it.
At some point in the China DCC thrad I conceded it is a surcharge, and should be treated accordingly as a bargaining factor.
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Old Apr 15, 2014, 8:25 am
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Originally Posted by percysmith
At some point in the China DCC thrad I conceded it is a surcharge, and should be treated accordingly as a bargaining factor.
That is precisely the posture i adopt as a consumer. Usually there is no point in arguing the merits, after all it is all about the price.
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Old Apr 15, 2014, 6:53 pm
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Originally Posted by percysmith
Visa/Mastercard/ACCC/[merchant lobby] won't facilitate it and can easily litigate against it - can easily portray the always declined option (whether opt-in or not) "deprives consumer of a choice". Comes from the same lobbying brains who said watering down the Sarbanes Oxley provisions to prevent another Enron will create jobs.
And if that should happen, there's always the class action lawsuit path as we did with foreign transaction fees.

Why should we let corporations make choices for us? Just because VISA/MC has billions in dollars doesn't mean we should let them rail over us. We managed to reverse some of their actions by making FTFs more clear through class action lawsuits.

We won FTFs.
We won the EMV conversion.
We can get banks to give us a selective DCC option section that we can preset ourselves online.

Originally Posted by cbn42
This is an intriguing idea, but what is to stop merchants from either 1) saying "sorry your card didn't work", or 2) surcharging foreign cards that don't accept DCC? The first is completely plausible in a foreign country, and the second may be a violation of the rules, but as we know, no one can do anything about it.
How would merchants know? No matter what merchants do, whatever selection they did on the POS side, the decline DCC is done automatically because the decline DCC option is already preset at the issuer side. And all transactions that are done online, especially in an EMV environment, goes to the issuer's server.

1. I hand card
2. Merchant processes it, tries to tack on DCC without providing the customer an option
3. Issuer server sees that cardholder preset decline DCC option
4. Goes through processing automatically without DCC
5. Merchant prints receipt thinking that they're getting more, probably not going to look at the receipt in detail anyway
6. I sign knowing that every transaction I make is without DCC as what I preset on the server end triumphs all POS entry choices
7. By the time I'm in my home country
8. Merchant sad to know that he/she get no DCC because cardholder already had it preset on issuer's servers

Last edited by kebosabi; Apr 15, 2014 at 7:02 pm
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Old Apr 16, 2014, 12:11 am
  #255  
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Originally Posted by percysmith
At some point in the China DCC thrad I conceded it is a surcharge, and should be treated accordingly as a bargaining factor.
Identifying yourself as a foreigner is the last thing you ever want to do if you are trying to bargain for anything. Even pulling out a credit card is usually not a good idea.

Originally Posted by kebosabi
And if that should happen, there's always the class action lawsuit path as we did with foreign transaction fees.

Why should we let corporations make choices for us? Just because VISA/MC has billions in dollars doesn't mean we should let them rail over us. We managed to reverse some of their actions by making FTFs more clear through class action lawsuits.

We won FTFs.
We won the EMV conversion.
We can get banks to give us a selective DCC option section that we can preset ourselves online.
The FTF lawsuit was about disclosure, not about providing options. Credit card companies aren't required to provide you with the option of having an FTF or not having an FTF, they are simply required to inform you of the cost. Similarly, if there were any DCC lawsuit, it would likely only be possible if DCC were not disclosed properly. As long as the receipt gives the amount charged, I don't see any basis for a lawsuit. Of course, IANAL.


Originally Posted by kebosabi
How would merchants know? No matter what merchants do, whatever selection they did on the POS side, the decline DCC is done automatically because the decline DCC option is already preset at the issuer side. And all transactions that are done online, especially in an EMV environment, goes to the issuer's server.

1. I hand card
2. Merchant processes it, tries to tack on DCC without providing the customer an option
3. Issuer server sees that cardholder preset decline DCC option
4. Goes through processing automatically without DCC
5. Merchant prints receipt thinking that they're getting more, probably not going to look at the receipt in detail anyway
6. I sign knowing that every transaction I make is without DCC as what I preset on the server end triumphs all POS entry choices
7. By the time I'm in my home country
8. Merchant sad to know that he/she get no DCC because cardholder already had it preset on issuer's servers
It doesn't work that way. When the merchant "asks" for a certain amount of a certain currency, the issuer can neither lower the amount nor change the currency. All it can do is decline the transaction.

If I go to the bank and ask for a loan of 200 euros, they either say yes or no. They don't put USD 175 in an envelope and say "here you are".

If what the merchant wants does not match what the issuer is willing to pay (in both amount and currency) the transaction will not go through.
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