While in Peru, I stayed at a few places where I was told that the only option I had to charge my room to a credit card was to charge the payment in US Dollars – these hotels said they have no way to make transactions in Peruvian soles. I had always believed that being charged in my home currency, rather than the local currency, meant being subject to dynamic currency conversion (DCC), which I prefer to avoid, but I wonder: What if a Peruvian establishment actually only accepts payments (even from the CC company) in US Dollars? Any insights? Thanks!

Some businesses and indeed some inviduals will have bank accounts denominated in USD all will have bank accounts in New Soles.

If a "normal" DCC is offered you will have the option to choose. If that is not being offered then it would seem the vendor is bypassing that stage before handing you the terminal. If not then it could be that the terminal is directly linked to a usd account, in which case if he has quoted a rate in dollars, there should be no difference as there is no conversion. If he has quoted in Soles they could be applying their own DCC I suppose.

I confess that in over six months of travel in Peru, I have never come across this. I have invariably paid in Soles apart from a couple of apartments we rented which were quoted and paid for in USD.

Thanks, crellston. I think each of the instances were ones in which the account was set up directly with a USD account, which would, as you suggest, mean no conversion. That's what people told me -- I'd just never heard of it, and instead always watch for DCC problems, so I was curious.

In Peru there were hotels that preferred to be paid in USD as well as some travel agencies. 3B was one of them buy I don't recall that they did DCC. When I've asked them about the charge if I wanted it to be in Soles I recall they did a manual calculation at a worse rate. I think I just went ahead and paid in USD. I was told (by someone who used to work at 3B) that some employees in Peru have an option to be paid in either Nuevo Soles or USD. There may also be some locations where the owner has an overseas account.

I think once I went to a sort of upscale restaurant in Barranco (Isolina) and got a little screwed over on a currency conversion but not sure how that happened. It amounted to a few dollars.

@ mlgb: Oh, that puts things in perspective a bit! Now that you mention it, I'm pretty sure that 3B was one of the places that initially quoted a price in USD and then switched to soles when I asked them to do so. It honestly hadn't occurred to me to check which rate was better, and I suspect that I ended up paying more than necessary at one or more of these places. It was always within the range that I expected based on a very rough estimate of the exchange rate, so I doubt I overpaid by much. Thanks for the explanation!