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Dynamic Currency Conversion (DCC) [2014-2016]

Dynamic Currency Conversion (DCC) [2014-2016]

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Old Dec 2, 16, 3:11 am   -   Wikipost
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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:
  1. Insert, swipe, or tap your payment card
  2. Have the cashier select credit (CR)
  3. The terminal will display CREDIT ACCOUNT
  4. If applicable, enter your PIN
  5. The terminal will display PROCESSING \ PLEASE WAIT
  6. The terminal will display EXCH <exchange rate> \ <currency> <amount> \ ACCEPT RATE? \ ENTER=YES CLR=NO
  7. 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.)
  8. 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 merchantís 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:

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Old Jan 18, 14, 10:10 pm
  #1  
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Dynamic Currency Conversion (DCC) [2014-2016]

As someone who's been unwillingly hit with Dynamic Currency Conversion (DCC), I thought we could get a thread going talking about people's experiences and best practices to avoid getting an unwanted DCC charge when using our cards abroad.
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Old Jan 19, 14, 12:48 am
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Just to be clear, DCC is not just a scam imposed on Americans by merchants outside the USA; it is international and is spreading like a cancer metastasizing through the travelling world. American merchants pull the same scam with the same lies on visitors to our shores and their credit cards also charge foreign transaction fees on them. When all is said and done, you may be paying up to 8% if victimized by this scam or agreeing with the philosophy that it is a service and good to know the exact value of something in a currency you understand.

Nice summary of dcc above. Just one minor corrction. A foeign transaction fee is imposed by many banks at least in the USA for purchases processed by a processor outside the USA. Thus for example, if you buy Aer Lingus tickets from Orbitz over the internet in a transaction that never leaves the USA, you are still nicked for the foreign transacton fee as Orbitz transmit the charge to Aer Lingus which processes its mc and visa transaction through a processor in Ireland (no surprise there) which means bingo another 3% despite the fact it is a US based transactin all the way.

And just to be clear as noted above, if the merchant refuses to do a charge the proper way with one of the lies they have readilly available, do not offer to pay cash. That is just rewarding them for their illegal attempt to derraud you. Simply cross out the amount in your currency, write dcc refused and initial that. Or if the merchant refuses to accept the charge sans your signature, just cross out the statement agreeing to be scammed and when you get home, dispute the charge. As this is a clear violation of mc/visa procedures the charge should be charged back to the merchant although if it is a small amount the bank may simply absorb the difference which may seem trivial butit's the principle of the matter and the only way to combat this scam.

Finally when checking into a hotel and renting a car outside your naitive land, watch for the scam of them inserting a phrase into what you're signing agreeing to be scammed with dcc. This can be difficult especially when they write this in the local language but it's one of the ways merchants, even some big time merchants such as Avis and Mariot, two companies who I know have pulled these shenanigans, have tried to pull this off.

This thread should be very good to hear the experiences of people being scammed by this monstrosity to help us all learn what we can do to avoid it.
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Old Jan 19, 14, 12:54 am
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Should this thread also cover DCC at ATMs?
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Old Jan 19, 14, 12:57 am
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Originally Posted by HkCaGu View Post
Should this thread also cover DCC at ATMs?
Why not? My most recent usage at a foreign ATM made it sound like the world would end if I didn't accept. It took three prompts to reject it.
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Old Jan 19, 14, 1:28 am
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The main culprit behind the international growth of DCC are Visa and MC. Both have been pushing merchants to buy into the practice. The argument is that a merchant using DCC is better than a merchant who doesn't accept plastic at all, but it remains entirely dishonest.

Some cities/countries are worse than others. I lived in Italy and rarely saw DCC used (with the exception of hotels, which often ask... I'm looking at you, Westin Excelsior). A week in Dublin, though, was DCC central. Nearly every merchant, except Trinity's bookstore, tried to get me to use it. A coffee shop didn't give me a choice and a call to Chase got the difference refunded. I quickly learned to say "charge me in euros" as I would hand over my credit card.
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Old Jan 19, 14, 2:44 am
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Great start to the DCC thread! ^
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Old Jan 19, 14, 4:02 am
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Originally Posted by augustus21 View Post
The main culprit behind the international growth of DCC are Visa and MC. Both have been pushing merchants to buy into the practice. The argument is that a merchant using DCC is better than a merchant who doesn't accept plastic at all, but it remains entirely dishonest.

Some cities/countries are worse than others. I lived in Italy and rarely saw DCC used (with the exception of hotels, which often ask... I'm looking at you, Westin Excelsior). A week in Dublin, though, was DCC central. Nearly every merchant, except Trinity's bookstore, tried to get me to use it. A coffee shop didn't give me a choice and a call to Chase got the difference refunded. I quickly learned to say "charge me in euros" as I would hand over my credit card.
I'm not sure mc/visa had much choice in this. After all, they make substantial income on the 1% they charge for currency exchange transaction and I believe it's 0.8% or something for allowing acces to the international interchange system even if no currency exchange is involve.d. It is or seems to be waiving of these fees is hardly ever done outside the USA and in the USA some do waive these fees, some pass along the fees and some of the near criminal banks impose an additional fee to bring it up to 3%.

But in any event, somewhere in the back of my warped mind there seems to have been some kind of agreement somewhere prohibiting mc/visa from prohibiting dcc as I remember. Now why it wouldn't apply to Amex I can't answer (although most of the Amex cards have foreign exchange fees). As far as discover, they really don't have all that much of an international presence. I hear China all the time and that may be true but very few places in Europe, for example, still take Dincers Club where supposedly Discover is interchangeable with. And aren't North American diners club cards processed through the mastercard system? So I don't think mc/visa are the culprits here.
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Old Jan 19, 14, 4:22 am
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Originally Posted by JEFFJAGUAR View Post
Originally Posted by augustus21 View Post
The main culprit behind the international growth of DCC are Visa and MC. Both have been pushing merchants to buy into the practice. The argument is that a merchant using DCC is better than a merchant who doesn't accept plastic at all, but it remains entirely dishonest.

Some cities/countries are worse than others. I lived in Italy and rarely saw DCC used (with the exception of hotels, which often ask... I'm looking at you, Westin Excelsior). A week in Dublin, though, was DCC central. Nearly every merchant, except Trinity's bookstore, tried to get me to use it. A coffee shop didn't give me a choice and a call to Chase got the difference refunded. I quickly learned to say "charge me in euros" as I would hand over my credit card.
I'm not sure mc/visa had much choice in this. After all, they make substantial income on the 1% they charge for currency exchange transaction and I believe it's 0.8% or something for allowing acces to the international interchange system even if no currency exchange is involve.d. It is or seems to be waiving of these fees is hardly ever done outside the USA and in the USA some do waive these fees, some pass along the fees and some of the near criminal banks impose an additional fee to bring it up to 3%.

But in any event, somewhere in the back of my warped mind there seems to have been some kind of agreement somewhere prohibiting mc/visa from prohibiting dcc as I remember. Now why it wouldn't apply to Amex I can't answer (although most of the Amex cards have foreign exchange fees). As far as discover, they really don't have all that much of an international presence. I hear China all the time and that may be true but very few places in Europe, for example, still take Dincers Club where supposedly Discover is interchangeable with. And aren't North American diners club cards processed through the mastercard system? So I don't think mc/visa are the culprits here.
In China Discover is processed through UnionPay and is probably more widely accepted. Similar to how it is processed through JCB in Japan. I have no idea what that means for DCC however.
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Old Jan 19, 14, 4:26 am
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Originally Posted by LoneTree View Post
In China Discover is processed through UnionPay and is probably more widely accepted.
Noted and logged. But I've read all sorts of threads where in China, dcc is very much practiced. So if using Discover in China, is one subjected to this scam?
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Old Jan 19, 14, 4:28 am
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Originally Posted by JEFFJAGUAR View Post
Originally Posted by LoneTree View Post
In China Discover is processed through UnionPay and is probably more widely accepted.
Noted and logged. Nut I've read all sorts of threads where in China, dcc is very much practiced. So if using Discover in China, is one subjected to this scam?
Oops, you posted before before I hit submit on my edit. I have no idea.

Based on a quick Google, it appears DCC is allowed. Discover specifically warns to look for it in general.

Last edited by LoneTree; Jan 19, 14 at 4:37 am
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Old Jan 19, 14, 5:09 am
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Originally Posted by JEFFJAGUAR View Post
Just to be clear, DCC is not just a scam imposed on Americans by merchants outside the USA; it is international and is spreading like a cancer metastasizing through the travelling world.

<snip>

This thread should be very good to hear the experiences of people being scammed by this monstrosity to help us all learn what we can do to avoid it.
I understand that itís more than US cardholders traveling overseas, and that it has happened to people all over the world, including others getting hit with DCC from merchants in the US. I will correct the wiki in a bit to reflect what you said, and you can feel free to edit it too. Thatís the benefit of a wiki!

Originally Posted by LoneTree View Post
Why not? My most recent usage at a foreign ATM made it sound like the world would end if I didn't accept. It took three prompts to reject it.
Yep, I figured we could have a comprehensive thread on DCC, including both purchases at the point of sale as well as ATMs. This way we can share information, best practices, and ways to look out for the tricks that merchants and ATM operators are now trying to pull.

Originally Posted by kebosabi View Post
Great start to the DCC thread! ^
Thanks! I aspire to be as great as your EMV thread.
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Old Jan 19, 14, 8:45 am
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I didn't see this covered, so I guess I'll ask here. If one has an EMV chip and pin card, is it possible to always avoid DCC by not entering his/her pin number until they can confirm they'll be billed in the local currency?
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Old Jan 19, 14, 9:19 am
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Originally Posted by ccohen322 View Post
I didn't see this covered, so I guess I'll ask here. If one has an EMV chip and pin card, is it possible to always avoid DCC by not entering his/her pin number until they can confirm they'll be billed in the local currency?
I will answer with a definite maybe. All I can tell you that when checking into my hotel in London last year with a chip and signature card, the clerk handed me the pin pad and the first thing it asked is which currency I wished to pay in, sterling or US dollars. I assume that's the first thing that happens in a chip and pin transaction. However, it is possible for certain dishonest merchants to push the "your currency" button before handing you the pin pad. So the answer is a definite maybe.
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Old Jan 19, 14, 10:44 am
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Originally Posted by JEFFJAGUAR View Post
I will answer with a definite maybe. All I can tell you that when checking into my hotel in London last year with a chip and signature card, the clerk handed me the pin pad and the first thing it asked is which currency I wished to pay in, sterling or US dollars. I assume that's the first thing that happens in a chip and pin transaction. However, it is possible for certain dishonest merchants to push the "your currency" button before handing you the pin pad. So the answer is a definite maybe.
It also won't help for transactions that don't require a verification method. For instance, many times under $25, $50, or even $100 now at some merchants in the US you don't need to sign for a receipt. If the point-of-sale terminal defaults to your card's denominated currency and the transaction completes without your interaction, you can get DCC without any authorization from you.
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Old Jan 19, 14, 10:52 am
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Originally Posted by Majuki View Post
Originally Posted by JEFFJAGUAR View Post
I will answer with a definite maybe. All I can tell you that when checking into my hotel in London last year with a chip and signature card, the clerk handed me the pin pad and the first thing it asked is which currency I wished to pay in, sterling or US dollars. I assume that's the first thing that happens in a chip and pin transaction. However, it is possible for certain dishonest merchants to push the "your currency" button before handing you the pin pad. So the answer is a definite maybe.
It also won't help for transactions that don't require a verification method. For instance, many times under $25, $50, or even $100 now at some merchants in the US you don't need to sign for a receipt. If the point-of-sale terminal defaults to your card's denominated currency and the transaction completes without your interaction, you can get DCC without any authorization from you.
Don't Visa/MC require explicit authorization from the terminal?
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