Jan 18, 2014, 10:10 pm
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:
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):
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:
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:
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:
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:
- Insert, swipe, or tap your payment card
- Have the cashier select credit (CR)
- The terminal will display CREDIT ACCOUNT
- If applicable, enter your PIN
- The terminal will display PROCESSING \ PLEASE WAIT
- The terminal will display EXCH <exchange rate> \ <currency> <amount> \ ACCEPT RATE? \ ENTER=YES CLR=NO
- 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.)
- 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:
Dynamic Currency Conversion (DCC) [2014-2016]
Jul 27, 2014 | 9:48 am
#886
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,113
It's still unclear on the Visa/MC side. Does the option of DCC really increase merchant acceptance? As people become more aware of DCC or realize that using a card would cost 3-7% more over cash, wouldn't this steer people toward using cash for purchases, opposite of what Visa/MC want?
It's similar to gas stations here in some states that allow cash "discounts" over credit prices. With the current price of fuel one pays about 3% more for the credit price. This is particularly common in New Jersey where all stations are full service, and I see most people paying cash for fuel. The mentality is cash is cheaper than credit/debit. That mentality could spread to overseas purchases which is exactly what Visa/MC don't want.
It's similar to gas stations here in some states that allow cash "discounts" over credit prices. With the current price of fuel one pays about 3% more for the credit price. This is particularly common in New Jersey where all stations are full service, and I see most people paying cash for fuel. The mentality is cash is cheaper than credit/debit. That mentality could spread to overseas purchases which is exactly what Visa/MC don't want.
By condoning non-compliant DCC, V/MC figured having one more merchant who can advertise V/MC acceptance outweighs to a hundred cardholders outweighs the cost of dealing with the one who complains, even if he tries to spread awareness of the DCC scam.
Jul 27, 2014 | 10:44 am
#887
Join Date: Jul 2007
Posts: 1,762
I agree that the issuer could be negative depending on whether or not the issuer charges a foreign currency conversion fee or a foreign transaction fee. Most, if not all, issuers in the US have switched to FTFs for those cards that have them, so you get nicked with the fee whether or not you accept DCC. I know you have indicated that your HK cards impose a conversion fee rather than a transaction fee, so I think they would have more of an incentive to file a chargeback than issuers who charge a FTF.
It's still unclear on the Visa/MC side. Does the option of DCC really increase merchant acceptance? As people become more aware of DCC or realize that using a card would cost 3-7% more over cash, wouldn't this steer people toward using cash for purchases, opposite of what Visa/MC want?
It's similar to gas stations here in some states that allow cash "discounts" over credit prices. With the current price of fuel one pays about 3% more for the credit price. This is particularly common in New Jersey where all stations are full service, and I see most people paying cash for fuel. The mentality is cash is cheaper than credit/debit. That mentality could spread to overseas purchases which is exactly what Visa/MC don't want.
It's still unclear on the Visa/MC side. Does the option of DCC really increase merchant acceptance? As people become more aware of DCC or realize that using a card would cost 3-7% more over cash, wouldn't this steer people toward using cash for purchases, opposite of what Visa/MC want?
It's similar to gas stations here in some states that allow cash "discounts" over credit prices. With the current price of fuel one pays about 3% more for the credit price. This is particularly common in New Jersey where all stations are full service, and I see most people paying cash for fuel. The mentality is cash is cheaper than credit/debit. That mentality could spread to overseas purchases which is exactly what Visa/MC don't want.
Jul 27, 2014 | 10:45 am
#888
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: Hyatt Globalist, Marriott Titanium, Hilton Diamond, IHG Spire Ambassador, Qantas Platinum, United S
Posts: 664
Furthermore, with Chase it's really easy to see exactly by how much you got ripped off with DCC. The posted transaction amount without DCC is the Visa rate on the posting date. So, you multiply the Visa rate on the transaction posting date with what the price was in local currency and subtract that total from the amount that shows up on your statement.
I remember it is 9am EST that Chase uses for getting its exchange rate. So presumably, we need to use http://usa.visa.com/personal/card-be...calculator.jsp and set the date to the posting date shown on Chase.com? This time difference stuff is making me crazy...
Also, how to determine the rate if transactions are posted during the weekend? Should we use the Friday rate or Monday rate, or weekends have rate as well?
Jul 27, 2014 | 10:52 am
#889
Join Date: Jul 2012
Location: Canada
Programs: BA Gold (OWE), Star Alliance Gold, Hilton Diamond
Posts: 2,194
It's similar to gas stations here in some states that allow cash "discounts" over credit prices. With the current price of fuel one pays about 3% more for the credit price. This is particularly common in New Jersey where all stations are full service, and I see most people paying cash for fuel. The mentality is cash is cheaper than credit/debit. That mentality could spread to overseas purchases which is exactly what Visa/MC don't want.
Jul 27, 2014 | 5:48 pm
#890
Original Poster
Join Date: Jul 2009
Location: SJC
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My point is that just like in some cases such as New Jersey where I see more people handing cash over to the attendants because cash = cheaper, I think that if DCC becomes ubiquitous that DCC combined with FTFs will cause many people to avoid using their cards overseas because they'll know cash = cheaper v. credit card = 3-7% higher price. This is exactly the opposite of what Visa/MC want.
Jul 27, 2014 | 11:12 pm
#891
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Join Date: Jul 2009
Location: SJC
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Yep~ I think moondog (or maybe another one of us) has pointed out this before, but which date should we use to get Chase exchange rate, and on visaeurope or visa?
I remember it is 9am EST that Chase uses for getting its exchange rate. So presumably, we need to use http://usa.visa.com/personal/card-be...calculator.jsp and set the date to the posting date shown on Chase.com? This time difference stuff is making me crazy...
Also, how to determine the rate if transactions are posted during the weekend? Should we use the Friday rate or Monday rate, or weekends have rate as well?
I remember it is 9am EST that Chase uses for getting its exchange rate. So presumably, we need to use http://usa.visa.com/personal/card-be...calculator.jsp and set the date to the posting date shown on Chase.com? This time difference stuff is making me crazy...
Also, how to determine the rate if transactions are posted during the weekend? Should we use the Friday rate or Monday rate, or weekends have rate as well?
Jul 28, 2014 | 2:37 am
#892
Join Date: Feb 2013
Location: Irvine CA & PEK
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I don't know which time zone you are in right now, but if you are in EST 9pm and go to visa.com, you see the latest available date to choose is today. If you go to visaeurope.com, the latest date is tomorrow already.
Therefore, Jul 28th EST might be different from Jul 28th UTC. That's my concern.
Can I assume since Chase is US-based, we can ignore visaeurope.com?
Jul 28, 2014 | 4:15 am
#893
Join Date: Jul 2007
Posts: 1,762
I am not saying anybody is wrong but I'm not completely sold on a couple of things bdeing said here but then again I am not sure. For example, I might make two different charges on the same day with the same card say in London; yet the exchange rates listed on those credit cards which show the exchange rate being used are slightly different. (Not dividing the GBP amount by the USD amount as that is rounded off to the nearest penny and might lead to differences in the third or fourth decimal places). I have always subscribed that to the constant changes during the day of international exchange rates. So for what other reason might the exchange rates be different.
As far as when the conversion is made, I was and still am under the impression the exchange occurs when the charge enters the international visa (or mastercard) network and arrives say at Chase if tghey're the issuer already converted with the 1% markup and then it's up to Chase to decide whether to eat it, pass it along or add 2%. Or perhaps Chase notifies visa inh advance what they wish to do and visa adds on the 1% or 3% as the case may be.
In no way am I saying I know this stuff is true, but that is what I have been led to believe.
As far as when the conversion is made, I was and still am under the impression the exchange occurs when the charge enters the international visa (or mastercard) network and arrives say at Chase if tghey're the issuer already converted with the 1% markup and then it's up to Chase to decide whether to eat it, pass it along or add 2%. Or perhaps Chase notifies visa inh advance what they wish to do and visa adds on the 1% or 3% as the case may be.
In no way am I saying I know this stuff is true, but that is what I have been led to believe.
Jul 28, 2014 | 4:34 am
#894
Moderator: Manufactured Spending
Join Date: Jul 2011
Posts: 6,707
Regarding your last paragraph, we went through a discussion of this and I don't want to kidnap the thread but...although I know several states despite the legislation allowing surcharges on cc's had or still have prohibitions on surcharges, the one in NY was thrown out as a violation of freedom of speech (I finally read the decision and to me it's still a stretch; basically the judge said there really is no difference between a surcharge and a discount for cash so why should a merchant be prohibited from a surcharge when he or she can charge extra simply by calling it a cash discount). But the question is this; does any state, even the ones which prohibit surcharges, enforce the reg against gasoline retailers and do anything about their surcharges hidden as cash discounts? Apologies but I don't see any analogy to dcc.
Jul 28, 2014 | 6:36 am
#895
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,113
But you've got visa.com and visaeurope.com and they all have the exchange rate information. That's what gets me confused.
I don't know which time zone you are in right now, but if you are in EST 9pm and go to visa.com, you see the latest available date to choose is today. If you go to visaeurope.com, the latest date is tomorrow already.
Therefore, Jul 28th EST might be different from Jul 28th UTC. That's my concern.
Can I assume since Chase is US-based, we can ignore visaeurope.com?
I don't know which time zone you are in right now, but if you are in EST 9pm and go to visa.com, you see the latest available date to choose is today. If you go to visaeurope.com, the latest date is tomorrow already.
Therefore, Jul 28th EST might be different from Jul 28th UTC. That's my concern.
Can I assume since Chase is US-based, we can ignore visaeurope.com?
It really depends on the acquirer:
- I used two Visa cards overseas, one issued by two different HK banks, within minutes of each other in same merchant, with same posting date <-- same rate
- I used one Visa card overseas throughout a day in same city. Some transactions were posted on the same day, some on another day. But even the same-card same-day transactions have slightly different rates (one being noticeably different from the others).
So I think the acquirer determines what Visa rate we get, by controlling the time of posting.
And you won't get exact rate either because even if you are in the same timezone as the Visa website, the Thai/Chilean/Australian acquirer isn't.
Last edited by percysmith; Jul 28, 2014 at 8:13 am
Jul 28, 2014 | 7:28 am
#896
Join Date: Feb 2013
Location: Irvine CA & PEK
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Posts: 664
What I observed is that my two Chase Visa cards (Sapphire Preferred and United Club) will bring slightly different rates even if two transactions are made almost simultaneously, one on each card.
And almost always, United Club card has slightly higher rate (about 0.1% to 0.2%), while Sapphire Preferred usually stick to the rates posted on Visa.com.
I will post some of the transactions here later when I have the time to dig through the statements.
@percysmith: Can I assume, based on your idea, that even though acquirers have control over the posting date, the rate used is still according to Visa/MC (on that day)?
And almost always, United Club card has slightly higher rate (about 0.1% to 0.2%), while Sapphire Preferred usually stick to the rates posted on Visa.com.
I will post some of the transactions here later when I have the time to dig through the statements.
@percysmith: Can I assume, based on your idea, that even though acquirers have control over the posting date, the rate used is still according to Visa/MC (on that day)?
Jul 28, 2014 | 7:58 am
#897
Original Poster
Join Date: Jul 2009
Location: SJC
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But you've got visa.com and visaeurope.com and they all have the exchange rate information. That's what gets me confused.
I don't know which time zone you are in right now, but if you are in EST 9pm and go to visa.com, you see the latest available date to choose is today. If you go to visaeurope.com, the latest date is tomorrow already.
Therefore, Jul 28th EST might be different from Jul 28th UTC. That's my concern.
Can I assume since Chase is US-based, we can ignore visaeurope.com?
I don't know which time zone you are in right now, but if you are in EST 9pm and go to visa.com, you see the latest available date to choose is today. If you go to visaeurope.com, the latest date is tomorrow already.
Therefore, Jul 28th EST might be different from Jul 28th UTC. That's my concern.
Can I assume since Chase is US-based, we can ignore visaeurope.com?
I've always used the Visa US rate and have been able to reconcile the posted transaction amount exactly by using the exchange rate for the date the transaction posted. For example:
Date of Transaction
06/06 NANDOS WORLD SQUARE SYDNEY 42.12
06/06 AUSTRALIAN DOLLAR
The posting date was 6/8, so looking at the Visa USA exchange rate on June 8th:45.00 X 0.936000000 (EXCHG RATE)
Exchange Rates
Currencies fluctuate every day. The rate shown is effective for transactions submitted to Visa on June 8, 2014, with a bank foreign transaction fee of 0%.
1 Australian Dollar = 0.936106 United States Dollar
Currencies fluctuate every day. The rate shown is effective for transactions submitted to Visa on June 8, 2014, with a bank foreign transaction fee of 0%.
1 Australian Dollar = 0.936106 United States Dollar
45.00 AUD x 0.936106 USD/AUD = 42.12 USD
There is a slight discrepancy between the Chase rate of 0.936000000 and the Visa rate of 0.936106, but I've never had it impact the calculation of the posted transaction amount.
Jul 28, 2014 | 8:08 am
#898
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Join Date: Jul 2009
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I think you might be onto something here. I had two transactions both on June 7th according to Chase that posted on June 10th. The earlier one from the afternoon had an exchange rate of AUD:USD of 0.936740262. The later one from dinner had a rate of 0.936742934. The Visa rate for June 10th was 0.936706. In neither case do I get a different result by using the Visa exchange rate, so I think at least for Chase cards it's easy to tell exactly how much the transaction would have been had you used the Visa exchange rate if you get hit with DCC.
Jul 28, 2014 | 8:16 am
#899
Join Date: Feb 2013
Location: Irvine CA & PEK
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Sydney has Nandos? Nandos the chicken restaurant? My wife loved this in London! We are going to Sydney soon.
Jul 28, 2014 | 8:31 am
#900
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I still can't explain the slight discrepancy in between the listed exchange rates and the official Visa rate unless it's some instantaneous rate that the acquirer pulls from Visa?