Come on, kebosabi, this is FlyerTalk! :) We're always trying to optimize our earn and burn ratios. :D If I play the devil's advocate, I would say we could avoid both of these problems, DCC and lack of EMV/PIN transactions, by paying cash. Furthermore, I don't expect all merchants would know about the Discover/JCB/UnionPay interoperability agreements. You said it yourself on the EMV thread that you wouldn't expect a cashier at Taco Bell in Missoula, MT to accept a JCB credit card, so why assume the reverse would be true?

I'm afraid we're some of the few who care about these issues, so even if all of us switched to using Discover only in China it wouldn't even be a blip on Visa/MC's radar. There would be plenty of unsuspecting visitors with foreign currency denominated cards getting hit with DCC.

Nah. Cash earns nothing, Discover at least earns something! :D

If it's a three way race between choosing VISA/MC vs. Discover vs. cash, then the best option will still be Discover. Less hassle, no annual fee, no FTF, no DCC, and still earns something.

And for the Discover card that I have, between Jan-Mar, restaurants earn 5% cashback, so if I'm in Asia during that time, Discover actually becomes my preferred card at the restaurant in China.

I don't. And can even attest to it that even in places out in rural Japan, it took some convincing to let them run through my Discover Card via the JCB network. I was able to get by because I could actually speak Japanese, so I would imagine that it would be more difficult for an average American with a Discover card out in rural Japan.

For Discover and Union Pay however, Discover actually has this printable wallet card pdf that I can cut, fold, and laminate. Haven't had any trouble so far in China by just handing this pdf to them, which is a great plus for someone who can't speak Mandarin or Cantonese (but can sort of read the characters through kanji).

And no, I have no idea why Discover would have this printable wallet card for Union Pay but not for JCB. Thanks for putting into light of this, I'll send off a secure message to Discover if they can create a wallet card pdf for JCB merchants in Japan as well.

Taco Bell in Missoula happily accepts UnionPay cards at least, and finds them interesting, so I doubt JCB would be an issue.

I also recall you mentioning that since Missoula is a college town with int'l students. The Taco Bell and likely the Burger King next to it are likely to be well aware of int'l students paying for stuff with Union Pay cards.

While you guys might hate "Mainland China", Taiwan's --and to a much lesser extent, Hong Kong's-- economies are dependent upon it for their survival. In spite of this "macro" stuff, China is pretty cool country on the personal level.

@percysmith: The restaurant manager I told you about here in Shekou is really looking forward to meeting you because he is embarrassed by DCC, and wants to fix the problem. He promises us free drinks for our efforts.

Thanks for this thread! When I was offered to pay in usd in Scotland I knew what it was.
Data points:
Had one vendor tell me there are no fees for it and the rate is better than my card offers.
Had one vendor tell me the register is set that way and they can't change it.

I'm worried for Hong Kong but glad that bringing discover is an option.

Actually using Unionpay will be better for me than a Visa/Mastercard given better exchange rate http://www.hongkongcard.com/forum/fo...p?id=11430&p=5 #41. But the maths will be in Visa/Mastercard's favour if there's a overseas spending promo - I don't like being denied my opportunity to earn that.

On the contrary, I think it would be easier at Taco Bell in Missoula, because of cultural issues. Taco Bell in the US is likely to be staffed by minimum wage teenagers who don't have a clue and don't really care, and will probably swipe whatever you give them. When was the last time you had a cashier check the logo on the card before swiping? In Japan, society is more about following rules and maintaining order, and staff are better paid and more professional, so it will be harder to get them to "just try it".

But it's still a cop-out to avoid DCC. Just like with mag stripe only cards, the only thing I want is for there to be a true choice of whether or not to use DCC in the transaction. I actually praised Discover in the wiki because they have been the most proactive about educating consumers about DCC even though Discover cards are not subject to it.

We also have to recognize that circumstances may change, and there may be a point in the future when AmEx and Discover also bring the scourge of DCC to their networks. Even though right now using AmEx or Discover might be the path of least resistance, in the future it might not be the case.

I wasn't aware of the pocket card for merchants using UnionPay, but it's a fantastic idea. ^

However, I imagine the first person who actually look at the card may have took some convincing, but as cbn42 says, in the US they're far more likely just to try things:

I imagine in almost all cases in the US the cashier mindlessly swipes the card. It doesn't require any calculations. You don't have to think. The transaction just happens. When someone pays with cash, it's almost unexpected now, and I always thnk of these Visa payWave commercials. :D

I harbor no animosity toward the Mainland, but my other half has had no inclination to visit. The biggest issue for both of us is the hassle factor in obtaining the necessary documents - táibāozhèng for her and an L Visa for me. We will be going for a wedding in June 2015, so I look forward to avoiding DCC there. ^

Yes, very true. Dairy Queen does reject one of @jamar's UnionPay cards though, not because it is UnionPay but because the terminal just won't take it (it says invalid card number or something like that). Only the one with a 19-digit or something number.

I'm glad this thread helped you on your trip. In the case of the second vendor, were you able to pay in GBP? If not, did you write "local option not offered" on the receipt before signing?

In the case of the first merchant, many of them feed you this garbage. There would be no additional fees on your card issuer's side if your card levied a currency exchange fee. However, most (all?) cards issued in the US have a foreign transaction fee rather than a currency exchange fee. This means that even if the transaction is denominated in USD, you will still get hit with a FTF if you card has one just because the purchase occurred outside of the US. Fortunately many good cards now have 0% FTF.

The rate for DCC usually a markup of 2-5%, and there have been few cases where the DCC rate has been cheaper than the bank's rate. Furthermore, going back to my previous point, if you're carrying a card with a 3% FTF, you're going to be paying anywhere from 5-8% when you add in the DCC and FTF.

I actually support Taiwan with respect to the 两岸问题, but the writing is on the wall. Please feel free to PM me in advance of your trip. You will have a nice time.

Yup, I'm glad I knew so I could decline. Probably was offered dcc 10 or so times.
For the merchant that said it was set that way, I just paid in cash.

Not these days. As with the US, many businesses in Japan have gone under due to a stagnating economy and have been replaced with big name retail chains who cut costs and staff themselves with minimum wage workers.

In terms of wages, Japanese minimum wage earners are paid about the same as their peers in the US; higher in the metropolitan areas (approx $10/hr or so) and lower in the rural areas (around to $7/hr).

So in terms of professionalism, it's not because they are better paid. It's more because of a culture where you're not supposed to question your superiors and you're supposed to follow rules. But these days, even that idea is also starting to crumble by the youth who make up the majority of minimum wage earners. "Why should we follow all these stupid rules and ideas, and overwork ourselves to the point of death when these black companies aren't paying us enough money?"

First world problems, same in the US, same in Japan.

I'm glad you were able to avoid the scam. In the other cases, did you offer proactively to the cashier that you wanted to be charged in GBP, or did some merchants actually give you the choice? How much pushback did you get with except the one who said it would offer you a better rate/no fees?

Majuki...one correction but it can be signficant.

A foreign transaction fee by those banks who pull this garbage is levied on any transaction processed outside well in this case if it's an American based card tghe USA. The transaction could take place in the USA but be processed outside the USA. The clearest example are many foreign airlines; say Aer Lingus. Buy an Aer Lingus ticket say on its US web site or from Orbitz, the transaction takes place entirely in the USA. But Aer Lingus processes its mc and visa charges through the Bank of Ireland even if the charge is in USA and bingo, you've thrown away 3% for nothing. OTOH, and I'll just use it as an example. Take a cruise on Norwegian Cruise Lines, use a mastercard or visa to pay for the incidentals even if the cruise takes place in Europe the charges are processed through Norwegian's US bank; no foreign transaction fee.

Another part of this scam and mayhbe some of the clerks believe this as I had it pulled on me is when they say the rate being used is better than you get from the bank and the poor confused tourist walks out, goes to the bank down the street, looks at the rates posted in the window and lo and behold believes the rate is better than the bank. Of course those rates are for transaction and are about 10% above the interbank rate while a DCC rate is generally about 5 to 8% worse than the interbank rate. So technically, the merchant is "correct".

Although with some discussions here, I'm not sure visa at least uses the interbank rate and charges on my Cash Rewards B of A cash rewards card (this particular version of the card claims to have no ftf) are somewhat higher than the interbank rate. I also was under the illusion the rate is constantly changing as the interbank rate does change from moment to moment but others have told me visa establishes some sort of rate each day which might not be the interbank rate and includes some sort of fee. If so, once again we are lied to. MC does seem to use the interbank rate.

Jeffjaguar - visa, MC and unionpay rates can be searched using following links:

http://usa.visa.com/personal/card-be...calculator.jsp
https://www.mastercard.com/global/cu...ion/index.html
http://www.unionpayintl.com/MainServ...exchangeRateEn

Visa and MasterCard rates are very close to what I get charged using their cards in HK (to about 0.1% either way). They are about 0.1-0.2% higher than yahoo rate. And unionpay is about 0.5% higher than visa/MC rate but attracts no fcc fee here in HK.

Discover's exchange rate is less attractive than Visa/MC's. It's usually 0.3% to 0.5% higher.

AMEX has good rates in China.

My experience in China is about 0.3%, therefore wiping out any general cashback (0.25%). Hotel and restaurant (not in a hotel) 5% categories have worked though.

I tried using my UnionPay card at a Sports Authority in Ohio but failed. Yes the terminal simply wouldn't accept the card, while the Discover Network can.

Tried this personally, and the paper does literally nothing in getting your Discover card accepted.

The only way to ensure that is to put a adhesive UnionPay sticker on you card. Even though this looks home-made, the cashiers would take Discover cards considering them as UnionPay cards.

Without this "logo" they would usually reject the card because of the fear of swiping some foreign unknown, getting hit with ridiculous fees, being blamed by the manager, and probably losing a chunk of their salary for this...

Buy these decals http://tb.cn/WLO3UVy

How will u discover guys distribute the stickers? Share them in a do?

This is way too big for the card.

I actually went to a printing office, and ordered five sheet of adhesive UnionPay logos (the same size as it is printed on cards). I only used two, so I have 4 sheets plus about 20 ones.

Anyone interested in getting one can PM me. I am in Beijing now.

I've often wondered if this is a form of DCC or simply the fact that the transaction has been done outside of the US? I had this happen to be on a BA ticket once about 5 years ago, but I couldn't make sense of it since everything was denominated in USD.

What's the rejection rate for a run-of-the-mill Discover card without the UnionPay logo? This goes along with some of the comments other posters have made stating that it would be far more difficult for cashiers to "just try it" overseas compared to the US.

Does AmEx have a better acceptance rate? My guess would be no outside of the high end hotels, restaurants, and department stores.

I'm potentially interested in some of these even though I don't currently have a Discover card.

Oh okay

In any case you can't get worse than this (the English translation):

http://item.taobao.com/item.htm?spm=...36&ns=1#detail

http://gd1.alicdn.com/bao/uploaded/i...pg_400x400.jpg

BA still does this:

http://www.hongkongcard.com/forum/fo...p?id=11968&p=3 #30

2014/08/20 2014/08/23 BRITISH A 1258514408280LONDON GB HKD 679.00

In fact, this makes us avoid BA's own branded card in HK which will be hit by the 0.8% fee if we used to pay things on ba.com with it (at least YQ). It's like thepointsguy comment somewhere that the best earning card in Hyatt is not the Hyatt card...


Citi HK claims it is http://www.hongkongcard.com/webedito...1355_88631.jpg

I disagree, there is no "conversion" that takes place. Rather, it's simply a multi-currency ecommerce transaction as described in http://en.wikipedia.org/w/index.php?...ldid=468719228.
- There's no conversion when BA for instance prices YQ for a partner redemption on CX in HKD (exact same amount as I would pay if I used CX Asia Miles) but chooses to collect it out of UK (case above)
- Nor apprently when CX.com bills USD for ex-US tickets http://www.flyertalk.com/forum/catha...ction-fee.html

As I remember, the foreign transaction fee, at least on USA cards, was the industry's answer to the claims of those pushing dcc that by allowing oneself to be dcc'd, they would avoid foreign currency conversion fees. Of course ripping people off on foreign currency tgransactions has always been one way banks make money and we all understand or at least should understand that bankers are always looking for new ways to gouge their customers (the same way the airlines are today). In any event as dcc became a factor in credit card transactions, visa/mc and indeed the banks began to see one source of their income erode. So theyt instituted the foreign transaction fee both on the network level and then an additional fee on the bank level.

So indeed it was a part of the dcc game when it was first imposed. Paroponents of dcc claims when people complain they get nailed twice if they're stupid enough to use a card with a ftf for foreign transactions to blame the bank that the original intent of dcc was to spare cardholders this charge and more fairly distribute to the merchants (and the acquirers too but that's never mentioned of course) the fee income for foreign currency conversion from the banks and credit card networks to the merchasnts and acquirers and how could that be unfair?

Where the problem comes in, of course, is the question of when does a transaction become subject to a forfeign transaction fee. There were hearings held on this, I believe several years ago in the US congress, and executives of some of the banks tried to defend the ftf on the grounds that transactions processed outside the USA are more constly because well fraud occurs more often on such transactions.

The airlines, of course, deny any culpability for these fees. So for example when a person buys $3000 worth of tickets on British airways and uses a credit card that imposes the dreaded 3% ftf and is nailed for a $90 fee, the first inclination is to blame the airline (which is what of course the bank wants). But the charge is not from the airline and has nothing to do with the airline. (Of course you can argue that if you buy a British Airways ticket in the USA denominated in US dollars, how can it be a foreign transaction and how are you supposed to know). Good question of course.

Moral of the story. Don't use credit cards with foreign transaction fees as you never know.

It would be nice if Discover would just put JCB and Union Pay logos on the back of the card much like they have the Diners Club logo on the back. Must be some kind of agreement that prevents them from doing that as my JCB card also doesn't have a Discover or Union Pay logo.

With AMEX, if they (usually upper-than-normal scale ones) accept AMEX, they swipe it; if they don't they just simply don't.

The problem with Discover is that it should be considered UnionPay card, but in reality merchants always consider cards without "银联" logo foreign cards, and they all have this idea (or taught by their superiors) that swiping foreign cards means bad things would happen.

So, my experience is that without the logo, you would be lucky to have half the places you try swipe the card. The most used excuse is "we don't take foreign cards", nonetheless Discover cards have been given a UnionPay issuer number and the transactions are purely UnionPay.

One thing I am not certain is whether merchant pay the usual 1% swipe fee for Discover cards. I understand UnionPay has tiered price scheme as well.

Exactly. This would be nice.

But maybe they don't think this agreement will last forever.

Really!!!!!!!!!????????

But the best one I've come across is a sign of "干货区", you know that one? 100% I cannot put the English on that sign here...

Actually, the best way to go is to find a printing office which can directly print the logo on your card, with scratch-resistant paint.

People have been asked me where I get the card, and why the logo is adhesive. I said it's a dual currency card issued in Guangdong with a bank from Hong Kong...

Anyway, no one has refused to swipe it even though they think the sticker is odd.

Talking about UnionPay cards, I feel that Shanghai merchants usually stick to the regulation and use appropriate POS machines (with correct merchant codes), but merchants in Beijing (like stores or restaurants) always have POS machines of bulk sale, civil services and so on, so they can avoid the percentage swipe fee and pay a flat minimum.

The downside is that you don't get any UnionPay points...

Jeffjaguar: yes you're right, when first imposed.

http://www.washingtonpost.com/wp-dyn...2900927_2.html

This is the status quo til now. I don't know where Citibank Hong Kong got the 0.4% "The fee is charged by American Express" given Citibank US doesn't charge this fee, nor American Express itself to its own customers, nor any of the other 3 Amex licencees in HK.

But anyway, in the multi-currency processing situation, is this fee justified?

Card associations certainly bears more cost as it has to perform international settlement for airlines and other merchants who choose to skinflint their international collections by using a multi-currency processing from their head offices. If card associations chooses to pass it on then they have a case to argue they're not profiteering from it.

Airlines certainly profit from cost savings by centralised multi-currency processing from head office rather than setting up local merchant accounts and remitting the proceeds. They're passing international remittance and administration costs to passengers. Their disclosure this happens is inadequate and they try to shift blame/hide behind zombie CSes.

Banks who pass on published card association fees, not add any of their own and make full disclosure of their cost recovery can't reasonably be blamed. However banks who add fees or try to charge them on Visa cards are blatantly price-gouging - AFAIK there is no difference in interchange earned from processing a local currency-denominated transaction offshore as compared to onshore. So they're just doing it because they have an excuse to.


Similar to multi-currency processing, DCC on the grounds it will save costs (or rebuttal on the grounds that customers should not bear additional fees) is unjustified. Before FTF, it was exploiting a similar loophole in card association fee structure. It's not "greed" that card associations recover their costs and plug the loophole.

Having the UP and JCB logo may mislead card holders though. Seeing the JCB acceptance logo outside of Japan and the UP logo in Hong Kong does not mean Discover is accepted.

Yes, this strategy is only intended to work in Mainland China if you want to have your Discover card useful.

Be aware of which network to use when outside Mainland China with the modified card.

Thank you for your excellent reply; but I'm sort of lost on the last paragraph. So perhaps with a concrete question example I can get a better idea of what you're saying. I buy $1000 worth of air tickets on British Airways from Orbitz in a transaction that never leaves the USA from Orbitz. Now Orbitz is acting s an agent of BA so it transmits the transacftion to BA via the Airline Reporting Corporaton if it still exists. Orbitz receives its commission in USD and is out of the picture at this point. BA has the charge for $1,000 and submits it to its visa let's say credit card acquirer in London. What happens at this point? Is it converted to sterling for them and they receive theirs (minus the discount of course) in sterling? Or in dollars? The charge then enters the international visa interchange in what currency? Sterling or USD? It is then transmitted to the US bank of the cardholder. In what currency? Sterling or is it converted back to dollars. At what point in this whole business is the charge converted from USD to UKL back to USD. Or is it in USD throughout the process. By doing it this way, does BA evade any foreign currency transaction fees? So when I get my bill, I get it that the additional 2% Bank of America or Citiblank or Chase may impose is a total rip off. We agree there. But what about the 1%? Who profits from that? Visa? British Airways? British Airways acquirer processor? That's the part I don'tunderstand in equating what the airline does to dcc.

jeffjaguar: I believe BA does not immediately translate the amount to GBP.

I just reran the 679 Avios redemption YQ I just I listed. Today BA.com lists HK$673.00 for Avios redemption and CX.com lists HK$723.00

HKD 380.00 - CX Fuel / Insurance Surcharges YRVA
HKD 120.00 - Hong Kong SAR - Air Passenger Departure Tax HKAE
HKD 173.00 - Thailand - Passenger Service Charge TSLA
HKD 50.00 - Hong Kong Security Service Charge HKS

The difference between BA and CX is the HK$50 HKS. For reasons unknown to me (but I'm very grateful) BA does not pass that on.

The HKD173 moved - it was HKD179 when I ticketed. This is obviously denominated in THB.

The other charges are denominated in HKD.

Given BA.com charges exactly the same as CX.com for the charges, my hypothesis is - BA does not convert the charges to GBP but keeps the amounts in HKD and hands them over to CX and HK Airport Authority.

If there's a conversion to GBP, I believe we should see a slight difference in amount charged e.g. the the YRVA will be 380.01 or 379.99 not exactly 380.00.

It's only a hypothesis but I hope it is seen as a reasoned one.

---

Does BA save? I think it does.
It is relieved from the administrative cost of setting up merchant accounts in every jurisdiction it operates, and bank charges for remitting proceeds back to head office.

But it still achieves compliance with the requirement of billing each passenger in the currency of the starting point of travel.

In lieu of BA paying remittance costs, the passenger is charged 1% (or 0.8%?) for sending payment to BA UK. Or the bank absorbs the card association cost (MC). Or the card association bears the cost (Visa).

---

Tying this back to DCC, the DCC merchant asserts cardholders save on foreign currency conversion fees.

This is true if the card used has no FTF. Even if so, an international fund transfer has occured, so the DCC merchant has merely exploiting the card association's absorption of fees to settle between member acquirers internationally or the issuer's absorption of the card association's fees.

Having arranged for a fee-free transfer of funds to the DCC operator, the DCC operator still has to convert the proceeds. The conversion rape (sorry, rate) is a constant rip-off - for HK, the exchange rate rort consistently exceeds any FCC savings we might earn.

This is a side topic.

I remember when we were talking about ATMs in Seoul charging oversee debit using fees, someone mentioned Korean banks' ATMs do charge additional fees for withdrawing money from oversee debit cards.

Last week I just tried using my Schwab Visa debit at a Woori Bank cash dispenser in Myeongdong, and there was no additional fee at all.

Coupled with the fact that I withdrew money from my UnionPay debit card from the same CD without paying additional fees, I think it is not hard to avoid ATM fees in Seoul: stick to the local banks.

I know for sure CitiBank CDs do charge 3000 won for using oversee debit cards.

Got hit with this twice (maybe more) - even when I tried to avoid it. Will call the bank tomorrow to give them the disputed amount in USD. Its only about $2, but these merchants are scamming us!

YUPP. Had this happened a few times now, in one time I actually saw it process without an option to opt out..

Percy...from reading your replies I'm still confused. We agree the additional 2% near criminal banks like Bank of America, Citibank,JP Morgan Chase add to the 1% ftf is a total rip off and a fee simply because they feel they can get away with it and Coangress doesn't want to tell them to knock it off. Fine.

But where does the 1% come from in the example we're discussing. Does their acquirer charge BA 1% which BA passes along to the customer? Or does the cc network charge 1% because they feel their perogative to charge 1% on currency conversion is being violated? Especially if no currency conversion takes place. Whose 1% is being passed along before the 2% is added on? Is it the acquirer? Is it the credit card network? Is it the merchant? I was always under the illusion it is the credit card network which adds the 1% and then gives the customer's bank the option of adding the additional 2%. So for those relatively good banks (relatively good as some banks absorb the whole thing) that only charge the 1% ftf and claim they are simply passing on the fee from well from whom. That's the part I still don't understand.

The rules of the road are always insist on being billed in the local currency proactively. If they say, "No choice." then you smile politely and nod. However, when given the signature receipt cross out the "I have been offered a choice" verbiage, write "merchant refused local currency", and sign. Also taking a digital photo with your phone is good supporting evidence. When you get home, use the wiki to determine the exchange rate for the date of the transaction and dispute on the difference. Try to ask for a reason code 76 chargeback. Fully expect that for small amounts the card issuer will give you a courtesy credit, but hopefully on some of the larger purchases you can get the full chargeback issued.

I didn't know that until now (about crossing out). When I have my next trip I will.

When you say "full chargeback" - do you mean you are getting a full refund go the entire purchase, not just the difference in exchange rates?

One hell of a way to stick it to the ripoff merchants in that case. In my case the difference is maybe $2-5 total, which I intend to collect out of principal. But I want to see these b#%#^£€ds change their ways. In particular one restaurant where I first learned of DCC - horrible service, hidden fees (coperto plus 15% gratuity) and the like made for a disappointing dinner. After that I became much more aware of the Italian trickery and tourist traps.