Article: Why is Dynamic Currency Conversion Even Legal?

[pyramidforce]

Can you still just avoid DCC altogether with an Amex card? I know acceptance is lower but at least where it is accepted, it might make it impossible to get DCC scammed by dodgy merchants.

In my recent trip to Japan, I was asked every time if I wanted AUD or JPY. Nobody tried to trick me and no dodgy machines with "accept the declining of the acceptance of the not-non dynamically non-converted currency"

 

[bernardblack]

Yes, as I understand it Amex prohibits DCC on its payment network. The problem (apart from acceptance) is that all AU-issued Amex cards have a foreign-transaction fee. The US market, if your have access to it, is different; my US Gold card has 0% FTF.

 

[Gold Member]

"accept the declining of the acceptance of the not-non dynamically non-converted currency"

Don't do what Donny Don't does.

 

[Beano]

OK, so we are agreed, DCC doesn't need to be made illegal, it's just the practice at the POS.

 

[Mattg]

This ATM in Lisbon today offered me a DCC rate with a 13.5% markup. Surely this is taking the piss?

FWIW, I declined and my Australian bank has debited $115.83 from my account for the €70 withdrawal.

 

[SYD]

View attachment 430968

This ATM in Lisbon today offered me a DCC rate with a 13.5% markup. Surely this is taking the piss?

FWIW, I declined and my Australian bank has debited $115.83 from my account for the €70 withdrawal.

Which is about $0.50 above the XE rate - as expected.

 

[SydneySwan]

View attachment 430968

This ATM in Lisbon today offered me a DCC rate with a 13.5% markup. Surely this is taking the piss?

FWIW, I declined and my Australian bank has debited $115.83 from my account for the €70 withdrawal.

I assume that was a proper bank ATM and not a Scamnet terminal. I made 2 ATM withdrawals from proper bank ATMs in Lisbon and Porto in November and got the proper mid-market rate. I can't remember if they asked the DCC question.

 

[bernardblack]

OK, so we are agreed, DCC doesn't need to be made illegal, it's just the practice at the POS.

I oppose legal restrictions on all sorts of financial practices so if I had my druthers, DCC wouldn't be illegal. But this is not a country where such principles generally prevail. And as highlighted earlier, Australian regulation has actively salted the earth where useful credit products could be offered, including stopping the card schemes from prohibiting DCC.

 

[RealtimeY]

Since I’d already selected EUR, I assumed that the message on the screen was asking if I accepted that my bank/card issuer would do the currency conversion so chose “Accept conversion”. And sure enough, the terminal then charged me in AUD with a markup.

I think the "safe" thought process here could be: "conversion" is bad, so always decline it no matter how many prompts you get.

 

[Mattg]

I assume that was a proper bank ATM and not a Scamnet terminal. I made 2 ATM withdrawals from proper bank ATMs in Lisbon and Porto in November and got the proper mid-market rate. I can't remember if they asked the DCC question.

Correct, this was a proper bank ATM and not Euronet.

 

[grandir]

By 2016 DCC was a thing
I used it a few times on a Euro trip and there was no 3% International foreign exchange fee

But the CC companies CHANGED their T&Cs to require the MERCHANT to be Australian

Got caught twice on the trip in June-Sept one in Germany with A hire car company was done by my mate while I was in the bathroom and another in Poland tap and go where the staff member had selected it without my knowledge. Small amount
Both whacked a 3% fee

It was offered more than occasionally so had to be alert to it

However Qantas Hotels does transactions in $A AND IS AN AUSTRALIAN MERCHANT so there’s no 3% fee on those overseas hotel bookings

*They require the merchant to process payments in Australia. A company can be 100% Australian, 100% fully located in Australia but if they choose to process all their payments in the Cayman Islands, then the banks will slap on the forex fee.

 

[kangarooflyer88]

And as highlighted earlier, Australian regulation has actively salted the earth where useful credit products could be offered, including stopping the card schemes from prohibiting DCC.

Australians want competition when getting ripped off at retailers. Limiting rip off opportunities to supermarkets and banks is simply not enough

 

[Gold Member]

https://loyaltylobby.com/2025/02/13/uber-opts-everyone-in-to-preferred-currency-with-1-5-fee-dynamic-currency-conversion/

Uber now defaulting to DCC without your consent. Manual setting change now required to turn off in app. Deceptively labelled as Preferred Currency Pricing (“PCP”) to ensure the customer isn’t aware they’re paying another fee.

It’s like one of our infamous local Airlines who deliberately hide their exorbitant carrier fees and surcharges and conveniently call them “Other” charges.

Of all the evil companies out there that might do this, Uber would up there with the best.

 

[moa999]

Note not yet applicable to Australia.

Where is Preferred Currency Pricing available?

Payment in your preferred currency is currently available in the United States, Canada, and the Eurozone.

 

[Gold Member]

Note not yet applicable to Australia.

I suspect it won’t be too long…

 

[SYD]

https://loyaltylobby.com/2025/02/13/uber-opts-everyone-in-to-preferred-currency-with-1-5-fee-dynamic-currency-conversion/

Uber now defaulting to DCC without your consent. Manual setting change now required to turn off in app. Deceptively labelled as Preferred Currency Pricing (“PCP”) to ensure the customer isn’t aware they’re paying another fee.

Looks like they’ve cut out the “middle man” and doing it themselves, hence the relatively small 1.5% v 6% typical for DCC.

But, yes I’d be disabling it pronto.

 

[pyramidforce]

Bad consumer practices are bad, but

1. If you don't have a no FX fee card in AU, a 1.5% wouldn't be the worst thing in the universe
2. If it is truly only a 1.5% fee on top of the mid market rate (and not Ubers made up rate), this honestly comes close to a notary FX fee card because i have manually calculated my transactions, and on some days, the MC/Visa FX spread can be as high as 1.6%(!!!!) (That was a one off on some day that the currency did really bad, probably was a weekend too). Even at a more normal 0.5% spread, most Australians pay a 1% surcharge when tapping at dodgy bakery anyway so I mean yea DCC bad Uber bad but it could have been worse.


Not defending the company just the mathematics.

 

[JohnK]

I've had various places charge the dynamic currency conversion and I've asked them to cancel and charge local currency.

28 Degrees is goof for foreign transactions and Virgin Money/ANZ appear to be better than the dynamic currency conversion.

It should be illegal. Same with surcharges to use card. They really think they're clever. Free in the 90's to get everyone using card, then 20c then 40c then 60c and then the beginning of bigger rip-offs.

 

[Beano]

I've had various places charge the dynamic currency conversion and I've asked them to cancel and charge local currency.

28 Degrees is goof for foreign transactions and Virgin Money/ANZ appear to be better than the dynamic currency conversion.

It should be illegal. Same with surcharges to use card. They really think they're clever. Free in the 90's to get everyone using card, then 20c then 40c then 60c and then the beginning of bigger rip-offs.

You may as well say any mark- up should be illegal, even finance companies must live! In some stores the mark-up can be 100% over wholesale.

 

[SYD]

You may as well say any mark- up should be illegal, even finance companies must live! In some stores the mark-up can be 100% over wholesale.

But that doesn’t translate to 100% profit after operating costs etc. Most people would appreciate that. Plus you can shop around if you want.

DCC is pure profit for an unnecessary service that adds zero value add - despite the spin they put out.