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

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

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

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

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

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

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

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

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

The other charges are denominated in HKD.

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

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

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

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

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

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

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

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

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

This is a side topic.

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

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

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

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

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

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

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

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

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

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

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

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

Just want to say thank you to all of those here that take the time to complain/chargeback regardless of the dollar amount. That is the only way (besides lobbying) to put pressure on the banks to make changes. Now if only CNN would run a special report, "Travelers Beware" style.

Exactly. I already got $1.21 back from the first claim... I think I'm owed another $0.50 still on the 2nd on... props to Citi/MC for being so quick.

Full chargeback means that the bank actually "charges back" the merchant and has them redo the transaction in the local currency. As the consumer it doesn't make a difference; you still get the same amount of money as a credit. The bank will just suck up the cost ( of the DCC) as the cost of business and give you a coutresy credit because chargebacks could cost more time and money than just the $1 difference.

The Kickstarter closed just now. According to Chase's notification emails/texts, their exchange rate worked out to be about 0.4% in their favor compared to Visa's. Definitely not high enough to make DCC a factor. ^

Sorry Jeffjaguar, I actually don't know exactly where the 1% comes from - you mentioned it first:

I thought you meant the 0.8% Mastercard FTF they charge to issuers (who then on-charge it to us) or the 1% Visa FTF mentioned in the washingtonpost article which they soon abandoned.

Visa and MC also charge 1% when a currency conversion has taken place, but I'm sure neither one of us is thinking about that.