fifty_two

Ok , so thats why since few weeks/months i receive the mail from my bank after each transaction in different currency than my card to inform me that transaction was processed with a rate XXX% higher than the ECB

But still it is not clear enough , in the case of amex (they dont do DCC) the mail i receive doesnt show what is their conversion rate + fees , it only gives the difference as percentage , i can see rate + fees only in the monthly statement

It is a progress , however not implemented by all banks + CC issuers at same time and the wording is not clear enough about who to blame for that

I guess until the situation will be solved (most probably by a big technological change or by a new disruptive game player) and allow customers to choose who will process their payments i guess it wont change much

To give you an idea , when i was living in turkey , it was (and probably is still) really common for businesses to have multiple card terminals , one from each main bank , this allowed customers to pay directly from their banks and avoid cross-network fees.

I also heard stories from friends who've been asked to change bank in order to receive their salary , as employer wouldnt pay fees if employees have accounts in the same bank

The lack of financial education (and sometimes other options) means people are like perfect sheeps for banks and CC issuers

At least most are honest , go to any marriott located in country where regulations are non-existant or very weak and you will see this percentage falling from 95% close to 0%

GUWonder

I've been rather amazed at where DCC has been popping up in the US -- it's showing up even at places where encountering a Canadian or Mexican bank card is very rare. It seems like the level of business ethics -- even when dealing with major brands, brands with their own reputational concerns -- keeps slipping closer and closer to the level of ethics of legendary snake-oil salesmen. And foreign bank card-using visitors are prime marks for this kind of sleazy stuff since their proximity to the snake oil-sellers is more fleeting on average than it is with regard to local bank card users.

The US Treasury, the US Federal Reserve Bank and even some other parts of the US Government could put a stop to this kind of fleecing activity in the US, but the financial services industry lobby is strong and has allies in other sectors of the economy that are more than capable of frustrating any efforts to try to regulate away this sleazy DCC stuff across the country.

fifty_two

Why would they care , cause foreigners dont vote for US senate, they just come , pay and leave

When i realised how much money i was wasting in the process , it's not hard to understand why this system is broken

In my case i decided to skip having a regular single currency card from my local bank and opted for multi currency cards from fintech companies when travelling abroad

As USD is very popular is not hard to find a provider which offer cards with USD or others as currencies available with your card ..... So , i can exchange money at rates similar/close to mastercard/visa interchange rates for low cost into lets say GBP or MXN and then use it when in the London or Mexico City

In very rare cases terminals might recognize that my card is foreign and try to charge me another currency but since i use only the local one if available it will be declined, and i can quickly spot when merchant is cheating on me

It is not just a lobby anymore , but rather a oligopoly (in case of CC) or mafia/cartel in general like the 5 big NYC families (banks , CC issuers, payment networks, payment terminals providers, etc...) as all benefit from that and have zero interests to stop it

In poland , banks only started to move their @$$ and offer similar services (multi currencies card) when they realised that people had possibility to choose and were massively leaving the matrix.

tmiw

The important thing IMO is whether one can still easily opt out (or at least easily reverse and rerun the transaction if someone attempts to force DCC anyway). While there haven't really been any reports here that that's a problem, it's still a bit of a concern for me given the relative infrequency of customer-facing terminals here vs. elsewhere (especially in the hospitality and service industries).

Majuki

Perhaps GUWonder could give some examples, but I've only seen DCC in a retail setting in the US with customer facing terminals. In the hospitality and service industries, I think the bias toward good customer service would prevail in the case of DCC, especially if a potential gratuity was on the line.

Fellow FlyerTalk member klashn is in Cairo right now, and he saw a DCC offer at an ATM for 1 USD = 14.64 at a 7% markup.

Majuki

I purchased a ticket on Volaris, and I noticed a section under the fees titled Multiple Currency Exchange Service and Multiple Currency Exchange Service Tax. On a $106.43 ticket this was $5.32 (5%) plus an $0.85 tax for a total of $112.60. Changing the currency at the top of the screen to MXN resulted in a total ticket price of MX$2188 or ~US$106.

Upon entering my payment card information (Visa) the website once again asked if I wanted to pay in USD for $112.60. The MXN option indicated that it does not include the exchange rate fee. The USD option said I could save up to 4%. I don't know if I follow that math since paying in USD was about 6% more expensive.

Majuki

I'm in Cancun, and I noticed an incredibly steep DCC offer from an ATM of around 7%. This was on top of the 10% - don't know if fixed - commission. I'll get the ATM operator fees reimbursed, but I think this is the highest I've seen.

greglvnv

I barely see any need for cash in places like Mexico or Brazil. The majority of vendors take cards to begin with.

tmiw

In my experience, as recently as 2018 or so cash only places were still pretty common in CDMX. I will admit that it's probably gotten way better since then, though, thanks to the pandemic and other factors.

Majuki

That would bring it back to DCC. There was a portion of the entry fee to Chichen Itza that had to be paid in cash today, and most of the souvenir vendors didn't take cards (although a some do).

Majuki

I stayed at the Canopy in Cancun and checked out on Monday morning. I had made the reservation in USD - and I confirmed even booking from the Mexican site would result in USD pricing as well - so I was curious how the hotel would handle this. I use an Amex for Hilton stays, so there is no danger of DCC. The reception took a preauth of 1,000 USD. Prices at the hotel restaurant and bar were denominated in MXN. Upon checkout, I was presented a bill with all charges presented in MXN, but the credit card slip was in USD. The curious thing was that the exchange rate was 22 MXN = 1 USD, which is more favorable that the current rate by 4-5%. I confirmed that the room charge & taxes matched the price at the time of booking in USD at a 22-to-1 exchange rate. I wonder who set that rate, and, if one presented a MXN denominated card would the preauth and final charge be in pesos? I did see a label on the terminal that said USD/MXN.

While this isn't quite an example of DCC, it is a currency conversion process that I hadn't seen before. The closest recent example I could remember is Aruba, but even that isn't an exact analog. The hotels there denominate everything, including the bill, in USD, so I imagine one would never see the AWG price unless paying in AWG.

rasheed

I've seen this at other resorts in Mexico where their internal exchange rate was favorable. It just really means they overprice all their MXN listed items.

bostontraveler

Though that is increasingly true, having some cash in developing countries is important. It is by no means like Europe or the US. Small shops often don't take cards.

bostontraveler

This practice is just downright fraudulent.

They get away with it because most Americans don't pay attention to exchange rates and think that it's convenient to see everything in USD. Sad but there is a general lack of education in this regard in the US.

I have had major arguments with hotels in Mexico (and elsewhere) that engage in this practice of quoting in USD, converting to local currency at an inflated rate and then converting back to USD again at an unfavorable rate to THEN try to charge with DCC. It's abominable.

What I tell them each time is: "It's fine to quote your hotel price in USD. You want to quote in a stable currency to minimize your risk. Fine. But here I am, checking out... let's look at the original price quoted. Convert it to your currency today. That's what I will pay you. Nothing more and nothing less."

The front desk folks sometimes don't understand the gaming their accounting offices do but eventually a manager emerges from the back and I pay what is due.

percysmith

Or Bintan in Indonesia (off Singapore) Dynamic Currency Conversion (DCC)