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.