yestravel

I have read about dynamic conversion but never experienced until now I think. I say "i think" because I'm not sure that is what we encountered. On several credit card transactions we would get the reciept to sign with the price in euros and then in USD. We would be asked to sign that we accepted the USD conversion which was always higher than the going conversion rate. In my case I was never aske if that was okay, just got the reciept with the info on it. I never signed the recieipt and had the store cancel the charge which was not always easy. My husband was asked if it was ok to accept the USD amount before the charge went thru and declined and was charged in euros. Is this dynamic conversion?

Also at the Madrid airport when we used an ATM, we got a message that said we accepted the following conversion rate -- the rate was a few euros higher than the going rate, but in our jet lagged haze we accepted the rate. We realized after that we should have declined and moved onto another ATM. This happened one other time elsewhere in Spain.

Michel_Paris

Anytime that you get offered the "opportunity" to pay in anything other than the local currency, you will then be liable to DCC. In esence, the vendor is saying trust me, I'll let you pay in your currency at a "good" exchange rate"

I was at the Sheraton Antalya in Turkey. They only accepted $US. Was this true, or were we DCC'ed? Someday I'll pull out the bill and investigate.

As for the ATM, what do you mean by "going rate"? No ATM will give you the interbank (newspaper) rate.

Alec

Yes, you had DCC when using your card in the shops and hotels etc in Spain, and when you got cash from ATM at Madrid airport. DCC is becoming quite common on Spanish ATMs, chiefly on those belonging to the Santander group. Unlikely to happen on ATMs belonging to local savings banks, like Caixa and Caja Madrid, Caja Toledo etc. When offered your transaction to go through in dollar (or anything other than euro), you have to answer No, and then it will be processed in euro, though sometimes pressing No key cancels the attempted withdrawal and your card is returned. In that case reinsert the card and start again, or I usually move to another ATM.

yestravel

Alec, Yes, I believe it was Santander Bank at the Madrid airport ATM. We used that bank again a few days later and it didnt happen, but later on in the trip using Santander Bank ATM a 3rd time we had the same response. this time we said No and got our card back. The woman in the Farmacia where we got the DCC the first time, said it was new and that it was "the same." I doubt she understood it. I just flashed to all the info on Fodors about DCC and said pls cancel the transaction and paid cash.

Michel_Paris, yes I know the interbank rate is not what we will get at an ATM. I always figure take the "newspaper" rate and add a few euros which is typically close. This ATM transaction at the airport was a good 5 euros above what we had heard the exchange rate was the day we left the US. Plus getting a message that said we accept this rate of exchange was odd we thought in retrospect.

cruiseluv

Thanks for posting this as I'm headed to Spain in a few weeks. I remember it happening to us once or twice in prior trips but it wasn't generalized. I certainly never got it at an ATM. I'll avoid Banco de Santander ATMs.

Robert2533

We ran into the DCC using the Bank of Santander ATM a couple of years ago and mentioned it here. It's a scam, nothing more, and created by an American, of course. His company receives a percentage of every transaction.

yestravel

I don't know that it's a "scam" but its definitley a moneymaker. At least on the they post the warning in English and u have the right to do as u choose. It wasn't generalised. Only happened a few times on credit card charges and the couple times at the ATM. We were away almost a month, so lots of ATM withdrawlas and credit card charges!

xyz123

Let's make this very clear.....dcc is most assuredly a scam as the rate used is far above what the banks charge for currency conversion and it is a scam because in some places, you are told lies such as, well it's really the same thing, or the amount listed is just an approximatin to assist you or I have no control over it, the terminal does it automatically or sorry it's too late or I don't speak English. And no, I wouldn't pay cash....if they refuse to undo the scam after giving them the opportunity to do the transaction correctly, and the only correct way is to do it entire in local currency, then simply circle the amount in local currency, instead of signing the statement write local currency option not offered and tell them you will be contesting the charge and then do it....the last time I had a confrontation about this with some of the above lies, the final step I did convinced the manager he better void the transaction and do it correctly. I would never give in to these scam artists. Do remember visa/mc rules clearly state the this scam may only be done with permission of the scamee!

Alec

'It's a scam, nothing more, and created by an American, of course.'
I think it was an Irish firm, Fexco in County Kerry, that first introduced DCC.

Robert2533

The following was published in the Washington Post in 2005:

By Gayle Keck and R. Paul Herman
Special to The Washington Post
Sunday, July 31, 2005

This burgeoning phenomenon is known as "dynamic currency conversion," or DCC. It turns out that some companies with a large volume of tourist business, such as Avis and Europcar, started the practice in select countries several years ago.

The service is offered to merchants by technology providers through the merchants' banks. It happens at the point of sale, so neither credit card companies nor the banks that issue your cards have anything to do with it.

It's important to note that DCC transactions currently apply almost exclusively to MasterCard and Visa. If you use an American Express card, your life is simpler and in some cases cheaper. AmEx is a closed system, without all the intervening banks and processors. The company adds a flat 2 percent currency conversion fee to overseas transactions and, aside from one merchant account, has "not had demand from merchants or cardholders for DCC," said spokeswoman Christine Elliott. (Discover Card doesn't add a fee for any foreign transactions, but is accepted in very few countries outside the United States.)

David Robertson, publisher of the Nilson Report, which analyses the consumer payment systems industry, says DCC is a way for merchants and their banks to benefit from international transactions where they didn't before. "You will find it at hotels, airlines, rental cars and restaurants serving tourists -- and in famous department stores, like Harrods in London," he said. According to Robertson, "two dozen" different technology providers offer the service.

Planet Payment is a U.S. company providing DCC for merchants in eight countries. Tom DeLuca, senior vice president of corporate development, sees it as "the wave of the future, where you can buy anything globally in your home currency." Planet Payment processes purchases for banks and merchants, adding as much as a 3 percent spread on the currency conversion. In other words, it calculates an exchange rate that leaves you paying up to 3 percent more than if your charge cleared at the interbank rate (the rate big banks charge each other). Planet Payment takes 1 percent, according to DeLuca; then merchants and their banks split the remaining 1.5 to 2 percent.

We tracked down our Irish hotel's DCC provider, Fexco Group. Deputy Managing Director Denis Crowley asserted that the "convenience" of seeing the amount to be charged in a customer's home currency is more comfortable for users -- and a better deal than changing hard cash at the local currency exchange bureau. But, based on our experience, it is clearly not always a better deal than asking that the transaction be run in local currency and allowing our credit card company to handle the conversion to dollars.

Crowley said his Killorglin, Ireland-based company adds an "uplift" -- that's a fee, to the rest of us -- of 3 percent on an exchange rate it derives from the Reuters service. He attributed our larger-than-3-percent spread to the fact that Fexco had fixed its rate on a Friday and we'd checked out the following Sunday, when the dollar was up slightly. We used a Capital One Visa card and actually received an exchange rate slightly better than that day's interbank rate.

When DCC began about four years ago, the theory was that it could all be a wash for consumers. Visa and MasterCard added a 1 percent conversion fee to foreign currency transactions; many of the banks that issue credit cards (Bank of America, Citibank, Chase) passed along Visa's charge and added on 1 to 2 percent fees of their own. Providers of the DCC technology figured they'd do an end-run by delivering transactions to the processors in dollars, thus sparing consumers the currency conversion fees and handing the profits to themselves, the merchants and merchant banks.