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]
Aug 31, 2014 | 2:13 pm
#976
Join Date: Jul 2007
Posts: 1,762
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.
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.
Aug 31, 2014 | 7:17 pm
#977
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,160
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.
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.
Aug 31, 2014 | 8:43 pm
#978
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: Hyatt Globalist, Marriott Titanium, Hilton Diamond, IHG Spire Ambassador, Qantas Platinum, United S
Posts: 664
Just a thought but, since so far we're getting many reports of "forced" DCC occurring in mainland China, Hong Kong, and Macau, what's the prospect of using Discover Cards (have no annual fee, has no FTFs or have a DCC policy like VISA or MC) and using it through the Union Pay network?
The caveat of course is that Discover doesn't issue EMV cards yet which is becoming a must for international travel, but they will eventually do so soon.
The caveat of course is that Discover doesn't issue EMV cards yet which is becoming a must for international travel, but they will eventually do so soon.
AMEX has good rates in China.
Aug 31, 2014 | 11:58 pm
#979
Join Date: May 2006
Location: PMD
Programs: UA*G, NW, AA. WR-G, HH-S, IHG, ALL. TT-GE.
Posts: 3,120
Sep 1, 2014 | 7:11 am
#980
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: Hyatt Globalist, Marriott Titanium, Hilton Diamond, IHG Spire Ambassador, Qantas Platinum, United S
Posts: 664
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).
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...
Sep 1, 2014 | 7:49 am
#981
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,160
Buy these decals http://tb.cn/WLO3UVy
How will u discover guys distribute the stickers? Share them in a do?
How will u discover guys distribute the stickers? Share them in a do?
Sep 1, 2014 | 8:29 am
#982
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: Hyatt Globalist, Marriott Titanium, Hilton Diamond, IHG Spire Ambassador, Qantas Platinum, United S
Posts: 664
Buy these decals http://tb.cn/WLO3UVy
How will u discover guys distribute the stickers? Share them in a do?
How will u discover guys distribute the stickers? Share them in a do?
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.
Sep 1, 2014 | 11:09 am
#983
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,983
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.
Sep 1, 2014 | 12:47 pm
#984
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,160
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 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.
In any case you can't get worse than this (the English translation):
http://item.taobao.com/item.htm?spm=...36&ns=1#detail
Sep 1, 2014 | 12:57 pm
#985
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,160
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...
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
Last edited by percysmith; Sep 1, 2014 at 1:16 pm
Sep 1, 2014 | 1:12 pm
#986
Join Date: Jul 2007
Posts: 1,762
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.
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.
Sep 1, 2014 | 2:39 pm
#987
Join Date: Jul 2006
Location: LAX
Programs: AA EXP 1.5MM, Asiana Club Silver, KE Morning Calm, Hyatt Platinum, Amtrak Select
Posts: 7,161
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 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.
Sep 1, 2014 | 8:41 pm
#988
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: Hyatt Globalist, Marriott Titanium, Hilton Diamond, IHG Spire Ambassador, Qantas Platinum, United S
Posts: 664
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.
Does AmEx have a better acceptance rate? My guess would be no outside of the high end hotels, restaurants, and department stores.
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.
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.
But maybe they don't think this agreement will last forever.
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.
Sep 1, 2014 | 8:49 pm
#989
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: Hyatt Globalist, Marriott Titanium, Hilton Diamond, IHG Spire Ambassador, Qantas Platinum, United S
Posts: 664
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...
The downside is that you don't get any UnionPay points...
Sep 1, 2014 | 8:52 pm
#990
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,160
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?
http://www.washingtonpost.com/wp-dyn...2900927_2.html
Oops. No way did the credit card companies want to lose out on their hefty fees. Visa International took in $424 million in currency exchange fees for the fiscal year that ended September 2004, according to Robertson of the Nilson Report. That's nearly 30 percent of its annual revenue, he said.
This past April, Visa began adding a 1 percent fee onto any foreign transaction, whether dynamically converted to dollars or charged in local currency. But then in June, it suddenly rescinded the move, and went back to the previous policy of charging a 1 percent fee only on transactions made in foreign currency. In a statement, Visa said it made the change to "address issues raised by cardholders, merchants, and member financial institutions." In other words, almost everybody was upset. The company is "now reviewing the fee structure related to single-currency cross-border transactions," according to Rhonda Bentz, Visa's vice president of public affairs.
MasterCard currently charges 1 percent on foreign currency transactions only, but has announced that, in October, it will switch to charging 0.8 percent for all foreign transactions, with an additional 0.2 percent fee for transactions made in foreign currency.
This past April, Visa began adding a 1 percent fee onto any foreign transaction, whether dynamically converted to dollars or charged in local currency. But then in June, it suddenly rescinded the move, and went back to the previous policy of charging a 1 percent fee only on transactions made in foreign currency. In a statement, Visa said it made the change to "address issues raised by cardholders, merchants, and member financial institutions." In other words, almost everybody was upset. The company is "now reviewing the fee structure related to single-currency cross-border transactions," according to Rhonda Bentz, Visa's vice president of public affairs.
MasterCard currently charges 1 percent on foreign currency transactions only, but has announced that, in October, it will switch to charging 0.8 percent for all foreign transactions, with an additional 0.2 percent fee for transactions made in foreign currency.
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.
Last edited by percysmith; Sep 1, 2014 at 9:16 pm