This decision was made when credit cards were first introduced and were not used in most/all transactions. It was thought outrageous at that time that Party A could order service, and Party B would have to pay the bill. However the CC banks succeeded in making CC surcharges illegal in the US, and possibly other countries. Now several decades later we no longer think that the banks' skimming on most of retail transactions is anything but normal.

It's rare to see surcharges in North America, but I've seen Chinese restaurants in Canada that have a CC surcharge. I don't know if it's illegal or not.

Yeah, CC surcharges are actually allowed in the US now thanks to a recent SCOTUS decision and previous settlements with merchants. Of course, other than at gas stations, they still aren't really considered "normal".

As for Australia, IIRC EFTPOS is free for merchants. That and debit being used way more than credit is why surcharging for credit is more common there.

Since this old thread is being revived, CC acceptance seems high in Sydney. Not sure what the locals usually use, but I didn't use a penny in cash. I got A$50 from the airport ATM. It's still on my desk now.

The locals use AUD debit as their preferred non-cash payment system. Not hard to build credit card acceptance on top of that with credit attracting surcharges

Probably legal https://en.wikipedia.org/wiki/Surcha...ystems)#Canada

Card associations will generally include no-surcharging T&C in their merchant agreements by default (e.g. HK is a by default jurisdiction) unless there is a statutory or regulatory override. Canada and Australia have the override, among others.

Actually, the spread seems to be decreasing, not increasing.

According to https://www.paypal.com/uk/webapps/mp...onversion-fees:

And according to the user agreement:

I read "based on" as Paypal taking the rates from the wholesale currency markets and possibly doing something with the rates (for example adding undisclosed fees). In other words, the total fee is unknown and could vary depending on the currency pair, when you make the conversion and other things. It doesn't say if the base exchange rate is the same when buying a currency as when selling the currency.

This is generally a problem with the DCC scam: a merchant claims a certain fee (or no fee), but the merchant's base exchange rate contains an undisclosed fee, so the customer can't rely on the fee stated by the merchant but has to obtain a fair exchange rate from a different source and calculate the fee manually instead. The European Union recently fixed this by requiring merchants to state the fee relative to the most recent reference rate published by the European Central Bank, but this only works within the EEA and only if the merchant thinks that the card's native currency is an EEA currency.

The spread is the difference between the buying and the selling rates. Paypal adds a fee of 2.5% when buying currency and also 2.5% when selling currency. In total, this gives a difference of 5% between the buying and selling rates, plus whatever difference there is between the buying and selling base exchange rates. In other words, the spread is 5% plus whatever is hidden in the base exchange rate.

The page you found states that the spread will be changed to 4%. As the current spread is at least 5%, this means a lower currency conversion fee. Also, since Paypal gives the spread directly, Paypal loses the opportunity of hiding additional fees in a base exchange rate.

Note that these are the terms for United Kingdom, while tmiw cited USA terms.

Yep. Currently, the spread is 3.75% for US accounts:


Much less of an increase than I thought it'd be, but still way more than one should be paying.

Hm. I just googled for Paypal currency fees and didn't realise that the fees aren't the same everywhere.

DCC now in some Monoprix in France.... UGH!!!!!!! Supermarkets now???

One Happy DCC Free Experience
 

Understandably, this thread hasn't seen many posts over the last 15 months, so I wanted to provide a new data point. Mrs. Majuki and I just returned from Aruba, our first international destination since the beginning of the pandemic, and I did not see a single instance of DCC. I will caveat this report though by saying that we only had and used USD denominated cards, so I can't tell if there would be hidden DCC like percysmith experienced in the Maldives if one were to use a non-USD card.

The experience was mostly like in the Maldives where things were priced solely in USD, but some merchants were more like the Cayman Islands with a 1.75 AWG = 1 USD rate. This is off by about 2.2% from the official exchange rate of 1.79 AWG = 1 USD, so one might come out ahead compared to being charged in AWG if the card used has a currency exchange fee.

We stayed at the Renaissance, and the website prices, reservation, and preauthorization at check in all showed USD amounts only. The hotel's food and beverage receipts indicated AWG and USD amounts with an exchange rate of 1.78 AWG = 1 USD. The Starbucks in the shopping plaza next door was set up to charge to the room, but I opted to use my card the two times we were there.

https://cimg7.ibsrv.net/gimg/www.fly...eac5d9f852.jpghttps://cimg9.ibsrv.net/gimg/www.fly...cfec07f8e4.jpghttps://cimg9.ibsrv.net/gimg/www.fly...a3fe5c1dd6.jpg

The first night we went to dinner at a restaurant near the hotel with a Caribbean Mercantile Bank (CMB) handheld terminal. Since it was pay at the table, I saw the waitress press for USD before entering the amount. While I didn't ask if it was possible to try to get my card to process AWG, I've searched for data points of similar setups in Aruba or the Cayman Islands. My understanding is that trying a transaction in AWG with anything other than a local card denominated in AWG will fail. This was indirectly confirmed when I was trying to use an unattended kiosk to buy fuel. The attendant said I had to go inside to use a terminal that could process international cards.

Some merchants used the 1.75 to 1 exchange rate whereas others used 1.79 to 1. I found that many restaurants would price in USD, so I didn't necessarily feel like price inflation occurred with the 1.75 to 1 rate since the menu prices and credit card charge were in USD. Most fast food places (Dunkin' Donuts, McDonald's, and Taco Bell) priced in AWG and charged USD at the 1.75 to 1 rate. This seemed to be mostly the case at retailers as well, but there were some that only displayed USD and never indicated a price in AWG.

https://cimg3.ibsrv.net/gimg/www.fly...33e7bed61f.jpghttps://cimg1.ibsrv.net/gimg/www.fly...e7b4e2130c.jpghttps://cimg3.ibsrv.net/gimg/www.fly...8bf1509a1c.jpghttps://cimg5.ibsrv.net/gimg/www.fly...702003510e.jpg

If one wanted to avoid the loss with establishments using the 1.75 to 1 rate, one could get AWG out of an ATM. I imagine this is possible, but I didn't withdraw any money while I was there.

I would definitely be curious if there were a merchant willing to try to process the transaction in AWG to see if it would work. I suspect that it wouldn't, but that's my only unanswered question.

Did a 3 day trip to Madrid/Spain and when using my CSR DCC options popped up on literally every transaction at touristic places (ie every place but the supermarket) even when just tapping the card on the NFC reader (ie 99% of the times). In Spain you are given full control of the POS terminal so tapping 'EUR' instead of 'USD' was never a problem. At checkout in the aloft I probably was not tapping the screen hard enough to the agent said 'you want Euro, right?' When I nodded vigorously she said 'this USD stuff is cheating, never ever accept it' :D

I guess contactless payments are no longer a good protection against DCC.

It's a total scam. This should be banned!

Here's a good video explaining how to decline DCC at ATMs. I thought the withdrawal amounts changing based the card's currency denomination was interesting:

The same channel also had a video about shady FX exchange places. Not sure if it is still up as they had to take down and remake a bunch of content, this video included.

Regardless I saw the DCC and high CZK tricks on the Euronet ATM in the airport and was able to avoid both, thanks to the earlier version of this video. The unfamiliarity with CZK denominations is probably why the scam works. The high amount scam is not as prevalent in other countries that have Euronet ATMs though.

And no, I did not have to pay the ATM fee since it was reimbursed by Schwab.

I wonder what happens when I stick a Unionpay withdrawal card in there.

Admittedly I haven't been to the Czech Republic in about 8 years. DCC seemed nonexistent during my last visit however I had few transactions since I was part of a group tour.

Let us know when you're able to make the trip. I only have Visa debit cards so no help there.

When I went in 2019, DCC was restricted to mainly ATMS. I didn't see it in many places (if any) that I remember

It's been around for a while, perhaps only in a few places.

About five years ago or so before I knew what it was I got nailed in Prague at an inexpensive pension / hotel :mad: And I was speaking Czech (though I've been told I picked up a bit of an accent over the decades, so no longer speak like a total native, but still not like a total tourist :rolleyes: ).

Really glad it is severely curtailed in France.
Spain is out of control... last time I was there it was everywhere.
Greece seems to be getting worse... I go to the same places every year and I noticed more a few weeks ago.

I've never seen DCC offered at an ATM, now that I think of it - just at hotels and retailers. But then again, I generally try to steer clear of non-bank ATMs, as they tend to be sketchier. Is this something that banks will do to their own machines, or is it just the third-party vendors?

I was last in Spain a couple of times in 2018, but I didn't have this issue. Then again, I don't think I actually used a credit card more than twice at a restaurant or retailer, as I generally take cash out at the ATM and then pay for everything with that cash (just a personal trick I use to better control my spending). I know when I was in Iceland in late 2017 I bought a wool blanket at a tourist shop in Reykjavik, and the terminal there offered DCC, but the guy kindly recommended against it upfront.

This isn't exactly DCC, but one thing I have seen is hotels that quote you a rate and charge your credit card in USD, even if that isn't the country's local currency. I had this happen in Uruguay and Israel - the hotel would list its rate as USD60 or whatever, the charge slip would be in USD, and the transaction would hit my card in USD for the exact same amount. So there was nothing underhanded - they just had a parallel currency system for those transactions.

Now that I think of it, in 2019 I was in Israel, flying back from TLV, and stopped into a duty-free shop at the airport to buy some chocolates to take to my office the next day. They had two prices posted, one in shekels and one in USD, and (thinking this was a DCC issue), I specifically asked to be charged in shekels. Then when the transaction hit my CSP card and it was converted, it ended up costing me like 60 cents more than the posted price in USD :p

Multi currency conversion
This can also be a source of abuse - Airbnb (at least used to) forcing the multi currency conversion based on user locale and adding a 3% surcharge no matter what the property was listed for in local currency.

IME Switzerland is one of the worst offenders. They allow mandatory DCC in ATMs, train ticket booths, etc. Human agents just tell you have no option to pay in Swiss Francs with your card. My experiences were limited to canton Zurich, but left me deeply disgusted with the whole country.

Yes some bank ATM do offer DCC. CIBC ATMs in Canada do.

If they accept Amex, that would be my option to pay in Swiss Francs then.

Really?? I haven't been to Canada since last January, but I don't recall ever seeing a DCC option at an ATM there. But the last time I used a CIBC ATM would probably have been at least three years ago, so not sure if it might be a recent addition. My last trips have been to Quebec City, and I usually use a Desjardins ATM there, and DCC has never been offered.

CIBC ATMs been like that for at least a couple of years. Other bank (TD/ Desjardins/ National Bank / RBC) and even deli/gas station ATMs don’t DCC in Montreal.

If your card was issued in USA, payment terminals only displayed the amount in USD, and no other option was available. That's what I meant by mandatory DCC that got me fuming.

There's a CIBC branch at St.-Laurent and Prince-Arthur where I've used the ATM in the past, but I haven't been in Montreal since at least 2018, and I don't remember that issue. As someone who's lived in Canada and pre-pandemic would go up there at least once and usually multiple times per year, I've never come across DCC. Now I really want to try a CIBC ATM haha.

I thought Amex cards don’t allow DCC - mandated or optional. Is that no longer the case?

Never heard of it, but would love to know what made you think so.
If true, how would AmEx implement that -- reject charges in the card's own home currency?

read, for example, posts in this thread starting at around #320.

I am fairly certain that Amex used to not support DCC, and it was cited by many as a solution to avoid accidentally getting hit with this scam. Not 100% sure if that is still the case, and I don’t have time right now to read this thread backwards to see if there was definitely a change.

I don’t know, but since they own the network and the cards, perhaps their network simply doesn’t or didn’t allow transactions in any currency other than the currency of the merchant.

AMEX acceptance agreement (between AMEX and merchant) requires charges to be submitted and paid in local currency.

That's good to know. I'll test if this still applies next time I'm overseas. Lately I noticed that AmEx joined Visa and MC in being "creative" in their own FX conversion. For example, they quoted me one rate on a pending airfare purchase, slightly delayed settlement, and ultimately used a much worse rate. When I checked Oanda, I found that there was indeed a brief rate srike in the 3 days of interest, and AmEx used the absolute worst rate to charge me. In the past, AmEx claimed that FX conversions in customer accounts are not used for the bank's benefit. Under the new management I'm seeing it's no longer the case.

I suspect the delay in posting the charge resulted in the lower FX rate....sort of how, when you do a chargeback on an international charge, you may actually lose money since the refund is issued at whatever the current rate is, not the rate that was in effect when you made the initial charge.

Yes, that was exactly my thought -- as if the bank was expecting that momentary spike, and used it to tack another $5 to my bill. For retail customers the difference is too small to bother, but for the banks this can add up to make a difference. Btw, I'm aware that the FX market is very liquid and can not be easily manipulated over the long term. But brief spikes happen all the time, and may be artificial in nature.

Not recent. They've been doing this since ten years ago https://www.hongkongcard.com/forum/show/3939?page=3 #27

Isn't that fee illegal unless the fee also is charged when you select to use DCC? It would be interesting to see what the banks would say if you request a chargeback of the fee.

Try the Bankomat brand in Sweden, owned by the big banks. I only have SEK-denominated cards so I don't see DCC, but I've sometimes seen receipts thrown on the ground where it says that someone has accepted DCC to convert the money into some other currency like EUR or CHF or NOK or whatever.

Can't you just point a camera at the screen and document that you weren't given an option to choose a currency and then request a chargeback from your bank? I think that the most efficient way to fix the problem is to request a chargeback whenever it happens as chargeback fees are very high and act as an incentive to the merchants to comply with the rules. What happens if you use a multi-currency card like Revolut and you only have CHF on the card? If they still use DCC then I suspect it's quite easy to get a chargeback as they both got the card's local currency wrong (it's CHF as your other balances were at zero but they thought it was some other currency) and because you aren't allowed to use DCC on multi-currency cards.

I remember seeing 250 SEK on a payment terminal in Copenhagen, then seeing it posting as 200 SEK after I declined the DCC offer. 25% must be the worst I've ever seen. Usually it's around 5-10%.

One would do those things only if they cared. I was in Zurich for a day as a forced layover. Found the city ugly, and hated its vibe. Did not really care about 1 extra EUR on a train ticket, and planned to never set foot in that wretched canton. On the list of features I disliked about Zurich and wanted to document, DCC wouldn't even make a footnote.