There is a mass of data, almost all proprietary, showing the profit percentages made from DCC and FTF. The most recent ones I saw showed the issuer made 32% of TOTAL gross profits from DCC. (pardon for shouting). It has grown since then.

Since FTF is declining rapidly in several major markets, the even more deceptive DCC has been replacing it and more. It is no accident that American Express has been slower to relinquish FTF's because they have not had DCC. I'll be prepared to make a small wager that they'll join this bandwagon soon. We all should remember that very, very few tourists will object because they're usually seriously ripped off on FX anyway, so DCC, if they even perceive it, may not be worse than what they otherwise will get.

Even some seasoned travellers have no idea what FX is, so this elegant solution will not do anything but grow unless somebody such as the EU gets in the act, and even if that happens it will not do so soon. Just in case anybody looks at my earlier posts, I am arguing the opposite side I took earlier. I insist to the right to have schizophrenia on this subject.:p

Sure, no problem. Everybody needs hobby interests. Consistency is overrated anyway! :p

For a traveler's international payment needs, I suppose we could say that DCC is better than paying Travelex-like fees. And paying 2.7% to AMEX in FTF beats a 4-5% DCC, for now at least.

There are some folks (likely not FTers) who are so price-insensitive that they will still accept DCC or other "convenience" fees, even after understanding that they really have nothing to gain from accepting the fee. So the burden is on us to stay alert to the scammers. <sigh>

You might also check credit unions and even smaller local banks in your area. My local bank's ATM/debit card is fee-free at all domestic MoneyPass network ATMs, and now has no fees for using foreign ATMs (used to be a limit of 3 free draws per month, then $2.00 per transaction). Also, I have yet to be charged any fees by the foreign ATM networks. I use only bank ATMs and stay away from anything that looks like a third-party machine. Every time I have checked, the exchange rates seem about as good as a consumer can do.

It's another financial system pest, just like HFT.

There's hope tho - Taiwan went really bad in 2011 (Global Payments was always to blame), but something happened and they went to full compliance again from 2013 onwards - nowadays DCC is offered but fully optional in Taiwan. I wondered what happened to them in between 2011 and 2013, and won't mind more of that happening elsewhere.

I don't know if I have been lucky throughout this time or what, but I never remember getting charged DCC in Taiwan even before I became aware of it in 2011. The only place I know where they refuse to honor DCC requests is for the room deposit at the airport Novotel in Taoyuan. However, I don't complain too much as this is merely a hold charge. I have always been able to settle the bill in TWD instead of USD. At department stores I've always been provided with a quote slip, and the [X] for NTD has always been honored. I always have my wife or in-laws tell the merchant I want to be billed in local currency.

Yes, I understand that. The point is that if the merchant is paid in a different currency than the issuer is charged, then someone has to do a currency conversion. It is either the association or the acquirer. The proposal to have a "flat" fee for the conversion didn't make sense because no bank is going to be willing to exchange currency for a flat fee and no commission over interbank rates, since it would be rather unprofitable to do so.

Chase Private Banking accounts have a black debit card which is FTF free.

I admit I did not take that post seriously because it would be inconceivable that it would ever happen. I'm sure you know all about that.

Even huge wholesale transactions are volume-sensitive, although the margins there are referred to in "pips". It is possible for consumers to get very fine foreign exchange rates, although one needs to know a fair amount to manage the process, and must have origin and destination accounts for the currencies to be used. The one I personally use is Oanda, but there are others. Oanda does explain the FX pricing pretty well IMHO.

http://fxtrade.oanda.com/learn/intro...nventions/pips

I am not an expert on banking transactions, but based on the international credit card transaction model that I understand:

Merchant -> acquirer bank -> network (Visa, MC) -> issuer bank -> card holder

The merchant wants to be credited the correct amount in local currency for the service, minus the swipe fee charged by the acquirer bank;
Acquirer wants to be credited the correct amount in local currency for the transaction;
In case a no FTF card, the issuer bank is charged the appropriate amount in card currency + 1%, which it absorbs for the card holder;
Card holder is debited the appropriate amount in card currency, and the rate is shown on the statement.

In this loop, the network does all the currency conversion and charges 1% for the service. Each side sees the transaction as a normal local currency transaction.

Therefore, anyone using DCC is just purely trying to rip people off, and a lot of these DCC people deceive.

Of course, that is based on the assumption that my model is accurate, which I don't have the confidence. But if I build a credit card network, it would be looking like this.

hIdeally, merchant wants to be credited the amount of the purchase with no fee payable by him.


Acquirer wants to maximise profit.
It might not be able to do so by increasing fees to merchant - look what's happening to Amex.
Might be easier to scam the cardholder, to which it has no ongoing relationship. Acquirers to cardholders are as transactional as hookers.


No-FTF - yes, it's concessionary pricing.

The only possible benefit DCC may bring is a choice of currency conversion is better than no choice in currency conversion.

Unfortunately I have yet to see a DCC supplier that offers a price improvement over V/MC - now DCC only exists to trap customers.

I don't think switching off DCC is practical without substantial cost to V/MC but policing them til they get run out of business may be.

The benefit was originally designed for cards that charge a foreign currency fee but no foreign transaction fee. In this case, DCC would save you the 3% charge from your issuer and therefore might be useful.

All credit cards that I know of in the US now charge the same fee for all foreign transactions, regardless of currency, which defeats the purpose of DCC. I am not sure about issuers in other countries but I imagine it's similar.

No. If you use an FTF card and DCC, you get hit twice because the transaction is still "foreign".

The DCC perpetrators can say with the same strength of conviction as holocaust denialists and Japanese history revisionists and say that's the issuer banks' greed, not them.

Did you not read the previous sentence before the one you bolded?

Several years ago, credit card companies charged foreign currency fees only if you used your card in a foreign currency. DCC enabled you to avoid this. Upset at the lost revenue, the credit card companies changed foreign currency fees to foreign transaction fees.

Yes, I read that sentence, and my point still stands: they get you both ways. What's more, I'm nearly positive that FTF on home country currencies was the SOP in the pre-DCC days (Citi dinged me for this before I was smart about my credit card portfolio).