Im a new user

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.

mia

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

tmiw

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.

Im a new user

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

bostontraveler

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

Majuki

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.



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.



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.

oliver2002

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'

Majuki

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

lsquare

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

Majuki

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:

restrictonthehanger

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.

percysmith

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

Majuki

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.

restrictonthehanger

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

EmailKid

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 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 ).