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Ryanair currency conversion
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benjus
Posts: 5,433 Forumite
I'm a frequent customer of Ryanair and in general I'm happy with the service.
However, one thing that annoys me is currency conversion. Flights are usually priced in the currency of the country of departure - this is the case right up to the final screen where you actually pay (even the card charges are priced in the flight currency) - then it mysteriously changes to the currency of my debit/credit card (i.e. GBP). You can see the conversion in advance via a tiny link called something like "see what you will actually pay in your currency". This is annoying because I buy flights with my Nationwide card and would like to benefit from the favourable exchange rates.
I'm curious as to the mechanics of what is going in here.
I believe this issue was previously raised on this forum, and it was suggested that Ryanair is performing Dynamic Currency Conversion (DCC). However, forcing this on the customer is against the rules - they are obliged to provide an option to charge in either currency.
So - is Ryanair breaking the rules on DCC? Or is there something else going on?
It occurred to me that Ryanair is a large company with operations in many countries. Therefore I would expect them to have multiple merchant accounts with Visa, denominated in the local currency of each country. I'm wondering if when you book flights with Ryanair they actually bill your card using a merchant account in the same country that issued your card (or in the same currency as your card). If this is the case, the card currency and the merchant account currency would be the same, so as far as Visa is concerned no currency conversion takes place. For example, I book a flight from Spain to the UK for €50, but Ryanair decides to charge my card from the Ryanair UK merchant account and converts €50 to GBP before charging me.
I am no expert in these matters, so my questions for anyone who knows what they are talking about is:
However, one thing that annoys me is currency conversion. Flights are usually priced in the currency of the country of departure - this is the case right up to the final screen where you actually pay (even the card charges are priced in the flight currency) - then it mysteriously changes to the currency of my debit/credit card (i.e. GBP). You can see the conversion in advance via a tiny link called something like "see what you will actually pay in your currency". This is annoying because I buy flights with my Nationwide card and would like to benefit from the favourable exchange rates.
I'm curious as to the mechanics of what is going in here.
I believe this issue was previously raised on this forum, and it was suggested that Ryanair is performing Dynamic Currency Conversion (DCC). However, forcing this on the customer is against the rules - they are obliged to provide an option to charge in either currency.
So - is Ryanair breaking the rules on DCC? Or is there something else going on?
It occurred to me that Ryanair is a large company with operations in many countries. Therefore I would expect them to have multiple merchant accounts with Visa, denominated in the local currency of each country. I'm wondering if when you book flights with Ryanair they actually bill your card using a merchant account in the same country that issued your card (or in the same currency as your card). If this is the case, the card currency and the merchant account currency would be the same, so as far as Visa is concerned no currency conversion takes place. For example, I book a flight from Spain to the UK for €50, but Ryanair decides to charge my card from the Ryanair UK merchant account and converts €50 to GBP before charging me.
I am no expert in these matters, so my questions for anyone who knows what they are talking about is:
- Does anyone actually know for sure what is going on with Ryanair and currency conversion?
- Is my suggested situation plausible?
- If my suggestion is plausible, how is the exchange rate obtained? Are there any legal obligations in setting the rate or can they just make it up?
Let's settle this like gentlemen: armed with heavy sticks
On a rotating plate, with spikes like Flash Gordon
And you're Peter Duncan; I gave you fair warning
On a rotating plate, with spikes like Flash Gordon
And you're Peter Duncan; I gave you fair warning
0
Comments
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1. No
2. Plausible yes. But Ryanair MAY be doing it for themselves.
3. If it is DCC it will be set by Visa, not Ryanair - though they may have an input. There are no legal obligations. And if is DCC you are supposed to be offered the choice, which suggests Ryanair are ignoring the rules (what's new there...) or doing it themselves.0 -
Thanks dzug - so if they are not using DCC they are free to invent whatever exchange rate they like?Let's settle this like gentlemen: armed with heavy sticks
On a rotating plate, with spikes like Flash Gordon
And you're Peter Duncan; I gave you fair warning0 -
You can be certain that Ryanair are taking advantage of DCC.
It has nothing to do with Visa/Mastercard.
Simply between Ryanair and local banks.0 -
Having dug a bit more I think you are right Donnie. However it's between the banks and Ryanair - not Ryanair choosing their own figure out of the blue. I suspect they have quite a bit of clout though.
Has anyone worked out exactly what loading they are applying? After all Ryanair may be doing it for free...
And Visa/Mastercard take a dim view of not being offered the choice:
Increasingly, internet sites and mail order companies are also offering this service. In some cases, the cardholder may not even be aware that they are being charged in their home currency, in a process known as "back office DCC". However, "back office DCC" has been outlawed by all card schemes and participating acquiring banks and merchants can expect serious penalties imposed by the card schemes.0 -
Paid a hold luggage surcharge whilst abroad and they did the same to me.
Paid 12 Euros and was billed in pounds. They didn't even take my signature with the system they use.0 -
The answer is not to click on the 'See what this is in your currency' link. I was ripped off once because I did this unknowingly, but while I agree they shouldn't be allowed to get away with doing it without telling anyone, I can confirm that if you don't click it they charge the card in the original currency. I have paid for many euro-denominated flights with my Nationwide card so it's obviously not a general rule.0
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