Dynamic Currency Conversion (DCC)

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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 More dynamic currency conversion coming to Japan? 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 merchant’s 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 Feb 20, 19, 7:32 am
  #601  
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I have US based Visa credit card issued by Chase that I use quite a bit for travel related expenses. Hence I have to be on the lookout for DCC.
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Old Mar 1, 19, 4:48 am
  #602  
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Singapore, I forget the particulars but a UOB ATM at Harbourfront (I think in the MRT fare area) offered DCC.
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Old Mar 5, 19, 1:57 am
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I was in Ukraine last weekend and came across an interesting DCC example at a PrivatBank (ПриватБанк) ATM.

Put my GBP debit card in the machine, asked to withdraw a few thousand UAH. Offered DCC, as expected. But it was changing it to EUR, not GBP. So my bank would still have to do a conversion. Rejected this and was offered it again. Refused a second time, next screen informs me there is a 150 UAH (~£4.25) fee for no-conversion. So I cancel transaction.

Another nearby ATM (IdeaBank) offered no DCC and had no charge - just the way I like it.

Otherwise I used a GBP credit card in bars, cafes, restaurants and shops seeing no DCC anywhere. Contactless and phone payments are very widely accepted, with some more expensive stores preferring it to cash.
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Old Mar 6, 19, 1:46 pm
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Originally Posted by BruceyBonus View Post
Put my GBP debit card in the machine, asked to withdraw a few thousand UAH. Offered DCC, as expected. But it was changing it to EUR, not GBP. So my bank would still have to do a conversion. Rejected this and was offered it again. Refused a second time, next screen informs me there is a 150 UAH (~£4.25) fee for no-conversion. So I cancel transaction.
I think you'd have a valid chargeback case.

The wrong card currency was identified, which should mean that you always are entitled to a correction of the currency to UAH if you used DCC. Also, it's not permitted to use fees or discounts to convince you to use DCC, so the fee should have been returned to you if you didn't use DCC.
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Old Mar 6, 19, 10:32 pm
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I recently saw advertising for the Travelex prepaid card and I just realized something: with a currency conversion fee at 5.5%, use of such a card may be one of the few times where DCC makes sense. Assuming the DCC fee is below 5.5%, of course.

That said, there are much better cards than Travelex (even just paying the 3% FTF on a regular debit or credit card is better), so I imagine most people wouldn't even consider getting one. Not to mention that DCC in general is a horrible concept that shouldn't be encouraged at all.
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Old Mar 19, 19, 2:09 pm
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A small hotel in Spain. Booked through booking.com, but full bill to pay on checkout. Very clear € bill. Very clear € instructions given. Very clear € on pin machine. Charged in GB£. Disgusting print out from terminal - "0% commission over wholesale rate". Actually a 6.5% markup over mastercard's daily rate. Charge back effected via NatWest. No replacement € charge made yet, but I'm happy if the hotel does that. It was a very small B&B type place and the owner appeared to not be overly commercially aware, so it may be Banco Popular (the terminal provider) over charging, or the owner is a good actor.

ETA: The MasterCard charge back code is now 4834 - p.168
https://www.mastercard.us/content/da...back-guide.pdf

Last edited by rjn21; Mar 19, 19 at 2:17 pm
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Old Mar 19, 19, 5:25 pm
  #607  
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Originally Posted by oliver2002 View Post
Argh, last week I was DCCed at Europcar in Munich. The agent stuck my CSR Visa in a new terminal they have now to capture the credit card information and rapidly pressed buttons to get things done... I briefly saw the USD question but she was to fast. The rental contract mentioned something about the card currency and I asked her to fix it. Since I was in a rush I didn't have the patience and she insisted I would be charged in Euro. Sure enough the invoice says:



So instead of the interbank rate of 1.128 and a 44.70US$ charge they hit me with 1.163 and 46.10$ Disputed it today with Chase, who will refund me the 1.40 as usual, but its still annoying.
Last week I was at the same station again and this time the agent handed me the terminal to operate. Sure enough a DCC question popped up where you had press the red button for no. The charge came in EUR and all was good. When I told the agent about the previous time she immediately responded with "that is why I tell my boss to let the customers push the buttons on the terminal" she was very inquisitive about DCC and didn't know that a mark up of 5% was involved. She mentioned that customers from the Gulf and the US preferred to be charged in their home currency.
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Old Mar 20, 19, 12:09 am
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Originally Posted by rjn21 View Post
ETA: The MasterCard charge back code is now 4834 - p.168
https://www.mastercard.us/content/da...back-guide.pdf
From what I've read, it still seems to be 4846?

Originally Posted by oliver2002 View Post
She mentioned that customers from the Gulf and the US preferred to be charged in their home currency.
My guess is they don't know they're being ripped off.
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Old Mar 20, 19, 12:29 am
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Originally Posted by Majuki View Post
From what I've read, it still seems to be 4846?
The pdf states:
POI Currency Conversion (Dynamic Currency Conversion) Chargeback Condition. One of the following:
1. The cardholder states that the cardholder was not given the opportunity to choose the desired currency in which the transaction was completed or did not agree to the currency of the transaction
2. POI currency conversion was performed incorrectly
Time Frame. 120 calendar days from the Central Site Business Date.
Message Reason Code. One of the following:
• 4834 for Dual Message System transactions

• 34 for Debit Mastercard transactions processed on the Single Message System
The following message reason codes may continue to be used, however, they will eventually be eliminated:
• 4846 (Correct Transaction Currency Code Not Provided) for Dual Message System transactions

• 46 (Correct Transaction Currency Code Not Provided) for Debit Mastercard transactions processed
on the Single Message System
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Old Apr 12, 19, 11:58 pm
  #610  
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Looks like DCC will no longer be allowed for prepaid Mastercards starting this summer: https://www.independent.co.uk/travel...-a8867606.html
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Old Apr 13, 19, 12:27 am
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Originally Posted by tmiw View Post
Looks like DCC will no longer be allowed for prepaid Mastercards starting this summer: https://www.independent.co.uk/travel...-a8867606.html
That's not what that article said.

.........it is extending the ban to multi-currency prepaid cards, which typically carry funds in sterling and either euros or dollars.

Mastercard says that if a prepaid card contains the local currency the customer should not be offered the option to pay in sterling – since such people have already decided to pay in the local currency.
That's a tiny subset of MC prepaid cards. Certainly nothing of this sort is offered in USA. DCC is not allowed only if your prepaid MC contains local currency. To avoid DCC in Mexico, for example, your card must contain MXN. A USD based MC prepaid card is still subject to DCC.
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Old Apr 13, 19, 1:02 am
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Originally Posted by TerryK View Post
That's a tiny subset of MC prepaid cards. Certainly nothing of this sort is offered in USA. DCC is not allowed only if your prepaid MC contains local currency. To avoid DCC in Mexico, for example, your card must contain MXN. A USD based MC prepaid card is still subject to DCC.
The Travelex prepaid card is available in the US but the ~5% currency conversion fee (IIRC) is likely worse than just accepting DCC in some cases.
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Old Apr 13, 19, 4:10 am
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Originally Posted by tmiw View Post
The Travelex prepaid card is available in the US but the ~5% currency conversion fee (IIRC) is likely worse than just accepting DCC in some cases.
Thank you. I didn't realize it is available. I suppose I never looked into Travelex as their rates and commissions are universally poor.

You still need to carry a card with local currency to avoid DCC though. If you carry a card with GBP and EUR but charge is in CAD, you are still subject to DCC.
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Old Apr 13, 19, 6:14 am
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Originally Posted by TerryK View Post
That's a tiny subset of MC prepaid cards. Certainly nothing of this sort is offered in USA. DCC is not allowed only if your prepaid MC contains local currency. To avoid DCC in Mexico, for example, your card must contain MXN. A USD based MC prepaid card is still subject to DCC.
This leaves other questions.

Let's say a prepaid multi-currency card allows you to deposit MXN. Will the terminal know if the MXN balance is zero, and should this matter to the terminal?

Let's say that you don't have any MXN, but you have EUR, GBP, JPY and USD. Which currency should the merchant offer conversion from? All of them?
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Old Apr 24, 19, 12:28 pm
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Originally Posted by greglvnv View Post
Just done with my stay in Sao Paulo and all I can say is that Amex had a 100% acceptance rate and just a general recommendation: if you want a piece of mind and no DCC troubles, give up your Visa/MC, at least here.
During two months in Brazil I've seen DCC only in Cielo POS terminals. They provide clear instruction for user and most vendors either asked me or selected BRL without reminder. There is another problem in Brazil, especially outside SP & RJ - at many POS they do not accept credit card (Bilhete Único top-up in São Paulo metro for example) or have surcharge for them (there is no or smaller surcharge for debit cards).
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