Dynamic Currency Conversion (DCC)

Old Jun 20, 2017, 1:18 pm
  #166  
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This is why you're using the card/Visa network and the protections it provides in the first place. Chargebacks and the issuer's handling them are all built into the cost of doing business.

I agree on the UnionPay comment. They don't want outside entrants.
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Old Jun 24, 2017, 8:52 pm
  #167  
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Here's something interesting I saw on hotels.com last night. Does this mean they actually do DCC? I wonder how bad the rate they use actually is.



EDIT: never mind, it looks like it was mentioned a few months ago.
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Old Jun 26, 2017, 12:50 am
  #168  
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This is not an instance of DCC, but it's a reminder to be vigilant about which card to use when making an online purchase. Mrs. Majuki wanted to place an online order from Superdry. Now, this appeared to be a US website, but it seemed as though orders were shipping from overseas. She brought it to my attention, and we placed the order using the Chase Sapphire Reserve instead of the Chase Freedom Unlimited. It turns out our guess was correct:



Even though the order was pricing on the website in USD natively - no conversion, DCC or otherwise, was taking place - the UK processing of the payment would have resulted in a 3% FTF with the Chase Freedom Unlimited.
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Old Jun 26, 2017, 4:47 am
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Originally Posted by Majuki
This is not an instance of DCC, but it's a reminder to be vigilant about which card to use when making an online purchase. Mrs. Majuki wanted to place an online order from Superdry. Now, this appeared to be a US website, but it seemed as though orders were shipping from overseas. She brought it to my attention, and we placed the order using the Chase Sapphire Reserve instead of the Chase Freedom Unlimited. It turns out our guess was correct:



Even though the order was pricing on the website in USD natively - no conversion, DCC or otherwise, was taking place - the UK processing of the payment would have resulted in a 3% FTF with the Chase Freedom Unlimited.
Foreign currency fees are bad enough... But foreign transaction fees are ridiculous.
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Old Jun 26, 2017, 9:44 am
  #170  
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Originally Posted by AllieKat
Foreign currency fees are bad enough... But foreign transaction fees are ridiculous.
I can somewhat understand a foreign currency fee, but a foreign transaction fee is ridiculous. In the case of foreign currency fees, it's reasonable to assume there is some overhead in converting the currency. However, it's also reasonable to assume that it's under the standard 3% that most Visa/MC branded cards levy.

I've often wondered if the shift from foreign currency fees to foreign transaction fees hasn't been at least in part due the proliferation of DCC.

Ironically, 10 years ago, one might even have been incentivized to take DCC. The DCC offer was around 3% versus your card's 3% foreign currency fee. The card's 3% foreign currency fee wouldn't count towards your rewards whereas the entire amount, including the 3% DCC, would count. With a FTF, it's almost never* in the customer's interest to accept DCC.

* This is assuming there are no wild fluctuations in the exchange rate where the local currency rapidly appreciates. However, depending on the card used, the networks either take the exchange rate at the time of purchase anyway versus the transaction posting date.
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Old Jun 28, 2017, 2:33 pm
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I think foreign transaction fee also makes sense. In case of fraud it could be much more difficult to recover money from abroad, also the potential recovery could be more expensive due to language barriers etc. Also, disputes could be more cumbersome, problems with jurisdiction, local regulations. Just this discussion above with customers contesting DCC payments and e.g. Chase Bank absorbing losses shows that foreign transactions are like a customer with lower credit score.
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Old Jun 28, 2017, 2:49 pm
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Originally Posted by tomjanowski
I think foreign transaction fee also makes sense. In case of fraud it could be much more difficult to recover money from abroad, also the potential recovery could be more expensive due to language barriers etc. Also, disputes could be more cumbersome, problems with jurisdiction, local regulations. Just this discussion above with customers contesting DCC payments and e.g. Chase Bank absorbing losses shows that foreign transactions are like a customer with lower credit score.
It doesn't cost anymore to recover fraud/chargebacks from abroad. The bank will issue a chargeback, the card network will notify the merchant's bank of the dispute and any response will go back through the card network (be translated) to the issuing bank.
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Old Jun 28, 2017, 3:41 pm
  #173  
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Originally Posted by reclusive46
It doesn't cost anymore to recover fraud/chargebacks from abroad. The bank will issue a chargeback, the card network will notify the merchant's bank of the dispute and any response will go back through the card network (be translated) to the issuing bank.
Correct. Any chargebacks will route through the networks. This is identical to a domestic transaction.

It goes back to the original question. If there is a foreign transaction fee, even if it's 0%, when is it ever in the customer's interest to select DCC?
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Old Jun 28, 2017, 4:18 pm
  #174  
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Originally Posted by Majuki
Correct. Any chargebacks will route through the networks. This is identical to a domestic transaction.

It goes back to the original question. If there is a foreign transaction fee, even if it's 0%, when is it ever in the customer's interest to select DCC?
I can envision DCC possibly being better if the cardholder's currency suddenly depreciates against the merchant's. The most recent example of that I can think of is the days immediately after the Brexit vote when GBP fell from near $1.50 to ~$1.30 in a span of about a week. Of course, that scenario is very uncommon/unlikely for citizens of most Western countries.
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Old Jul 7, 2017, 7:06 am
  #175  
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I might of found a workaround for the DCC . Android Pay. Been using it the past few weeks in Poland with my Chase USA visa and it never asked once if I want to pay in USD instead of PLN. Defaults straight to PLN and these are the same terminals that I was having issues with before.
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Old Jul 7, 2017, 7:26 am
  #176  
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Yep I suggested this last month http://www.flyertalk.com/forum/credi...l#post28397684, while discussing DCC in Poland

Uptake of contactless here in HK is slow though. And use of Apple Pay/Android Pay is frowned upon as an un-Hongkie practice as all acquirers attempt online verification (dynamic data authorisation) over very slow uplinks (sometimes phone lines).
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Old Jul 7, 2017, 8:08 am
  #177  
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Originally Posted by percysmith
Yep I suggested this last month http://www.flyertalk.com/forum/credi...l#post28397684, while discussing DCC in Poland

Uptake of contactless here in HK is slow though. And use of Apple Pay/Android Pay is frowned upon as an un-Hongkie practice as all acquirers attempt online verification (dynamic data authorisation) over very slow uplinks (sometimes phone lines).
Ah must of missed it. But that is great to hear. And with the Android Pay, I had no issues with a few hundred PLN (usually 50PLN is the max without a PIN when using the physical card)
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Old Jul 7, 2017, 9:49 am
  #178  
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Originally Posted by percysmith
Uptake of contactless here in HK is slow though. And use of Apple Pay/Android Pay is frowned upon as an un-Hongkie practice as all acquirers attempt online verification (dynamic data authorisation) over very slow uplinks (sometimes phone lines).
Why is contactless uptake low there, out of curiosity?

Also, doesn't this mean that cards from "online only" countries (such as the US) are frowned upon too?
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Old Jul 7, 2017, 8:49 pm
  #179  
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Us consumers love it
It's merchants (or more specifically, merchant staff) who hate Apple Pay/Android Pay

Root causes are Octopus dominance here, banks' reluctance to invest in terminal infrastructure (and perhaps worried about fraud from you-know-where) and pretty poor customer service levels in HK recently
So there's quite often bullying by cashier staff to bully customers into using Octopus, which makes life easy for them

Some of us have taken to writing to head offices https://forum.hongkongcard.com/forum.../18841?page=24 .
My case was my Oliver's Supersandwiches outlet across the street - they added a contactless terminal in April, decided to declare it broken in May and hide it from customer view, and then let customers use it in June *but only if they ask* (it is still hidden from view)

Last edited by percysmith; Jul 7, 2017 at 9:40 pm
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Old Jul 9, 2017, 1:27 am
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It's interesting because of the great uptake in SIN - on a recent trip, I was able to use it basically everywhere (except for hawker centers). In HK, I always present my phone for Android Pay - I can sometimes see the conflict in the cashier's eyes but usually, they seem resigned and then ask whether it is Visa or MC (I don't even know why this matters for AP because some places don't even ask) and then process it.
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