Dynamic Currency Conversion (DCC) - is it regulated?

kdaines

Hi all,

As a business traveler, I am abroad a lot and often use my Post Office credit card for hotels, restaurants, etc.
I've noticed a worrying trend recently on merchants automatically implementing Dynamic Currency Conversion (DCC) on bills, and not providing the option to pay in local currency.
Not only that, but when challenged, the merchant is often unable to offer me payment in the local currency, as the credit card chip and pin machines simply don't allow them to choose.
This happened to me in Poland last week, and the poor waitress even handed the machine to me and let me process the card payment to prove it was not possible for me to pay in the local currency!
I've noticed this a lot with PolCard chip and pin machines in Poland!

What are the legal regulations about DCC - I was under the impression that merchants offering DCC are legally obliged (in Europe at least) to offer payment in local currency as well - something to do with EU Directive 2007/64/EC on Payment Services. Is this true?

Would be interested to hear from anyone who has the knowledge to advise on this topic.

Cheers
Karl

dzug1

On a quick scan (and I may easily have missed something) nothing in that particular EU Directive relates to DCC

AFAIK the obligation (to offer a choice) is placed on retailers by Visa and Mastercard. PolCard may well not make that stipulation.

Alternatively the retailer may have set up his machine so as not to offer it (to 'help' his staff who might get confused??)

I did have a major battle with a hotel in Munich about a year ago (part of a major chain) - eventually my card issuer reclaimed the DCC charge, but it took a couple of months.

Not sure that helps you??

PolishBigSpender

Strange. A friend of mine has several PolCard machines, and they always offer the choice of paying in Zloty or via DCC. I know this, because it's their standard procedure to give people choice - people from Spain particularly appreciate being charged in Euro due to the hideous charges applied by their banks for non-Euro transactions.

zagfles

dzug1 wrote: »

On a quick scan (and I may easily have missed something) nothing in that particular EU Directive relates to DCC

AFAIK the obligation (to offer a choice) is placed on retailers by Visa and Mastercard. PolCard may well not make that stipulation.

Alternatively the retailer may have set up his machine so as not to offer it (to 'help' his staff who might get confused??)

I did have a major battle with a hotel in Munich about a year ago (part of a major chain) - eventually my card issuer reclaimed the DCC charge, but it took a couple of months.

Not sure that helps you??

But if the retailer is accepting VISA/Mastercard in his Polcard machine then surely they must abide bythe VISA/Mastercard rules.

Looking at the Polcard machine instructions (with help from Google translate) it would appear DCC is an option which the customer has the choice of, there doesn't appear to be an option to make it mandatory.

http://www.polcard.pl/upload_module/wysiwyg/instrukcja obs__ugi terminala.pdf

Mind you if I got the rate in the example they give I'd choose DCC

kdaines

Thanks all, some useful info - especially the link to PolCard instructions.

Looks like I just need to be a bit more forceful with the locals in future and make them hit the button with the red cross not the green proceed button! I'm guessing it might be more lack of training of staff using these machines more than anything else!

Just watch out in the awful restaurant at top of escalator in Katowice airport!

And so the battle with MasterCard begins to try and prove I was not given option, and forced to accept the DCC on my hotel bill!

Des_Von_Devon

zagfles wrote: »

Looking at the Polcard machine instructions (with help from Google translate) it would appear DCC is an option which the customer has the choice of, there doesn't appear to be an option to make it mandatory.

I have been charged the conversion rate numerous times in Poland when I didn't want it, I now specify that I want to pay in Polish zloty. I did this tonight in a restaurant called La Grotta near Katowice railway station. The waitress said fine, it had the amount 53.50zl on screen, I entered my pin, and out pops the receipt from Bank Polski:

Amount 11.66 GBP
This currency conversion is provided by eservice S.A.
I accept that I have been offered a choice* of currencies for payment offered by eService and that this choice is final.
I will have no recourse against payment schemes concerning the currency conversion or its disclosure.
I accept the conversion and final amount and that the selected transaction currency is GBP

* To me this is utterly scandalous, I wasn't given a choice and I requested Polish zloty, remember Bank Polski is majority owned by the Polish government, so the government thinks its OK to steal from visitors

Of course, when I said to the waitress that I got charged more she walked quickly away and hid in the kitchen.

Yes, its not a huge amount but I appreciate honesty and fairness. If they had on the top of the menu that there was a 3% charge for credit card bills, I wouldn't have an issue. To me it leaves a bitter taste in the mouth.

Last nights meal I had no issue with despite paying with credit card. I always pay my tip in cash so the server has more chance of getting it, I normally tip 15% to 20% as I did last night. Tonight she didn't get anything, so perhaps she will learn how to press the right buttons in future.

The free "In Your Pocket Guide" to Katowice (you can download as pdf or pick up in most hotels) has this to say about DCC:

Credit Card Charges
If you’re visiting Poland and plan to pay for any purchases
with a credit card whose base currency isn’t Polish zloty (and
unless you’re Polish, this probably means you) odds are you
may find merchants asking whether you want to be charged
in your home currency or zlotys. At times (though this is more
rare) it’s not even a question - the merchant will simply take it
upon himself to charge your credit card in your home currency,
no questions asked. Don’t fall into the trap of thinking your
credit card company won’t charge a foreign transaction fee
if you opt to be charged in your native currency; crossing the
border is what they care about, not the currency. And that’s
just one of the reasons why, when given the choice, it’s in the
best interest of your wallet to choose zlotys.
Why? Because the companies that process credit card
transactions typically tack on fees for converting the money,
and then do so at a lousy exchange rate. Depending on the
size and number of your purchases while in Poland, the cost
can really add up. Visitors will have to be vigilant and monitor
receipts when paying with a credit card, and should you be
charged in a different currency put your foot down. Merchants
don’t benefit from those additional fees, only the company
that processes the transaction does. So be firm about asking
to have your purchase refunded and done over again in zlotys.

SaveTheEuro

The hassle is so great I've given up using plastic in restaurants and shops in some countries. It's easier to pay in cash.

zagfles

SaveTheEuro wrote: »

The hassle is so great I've given up using plastic in restaurants and shops in some countries. It's easier to pay in cash.

Tend to agree - though I've never had DCC forced on me after saying I want to pay in local currency. Changing the currency after the PIN is entered is basically fraud - they are changing the amount you authorised after you've authorised it. I'd be demanding a chargeback from my bank.

There again - if it happens in a restaurant, a zero tip may give them the message. I tend to tip about 10%, no way on earth I'd tip if they imposed DCC on me without asking, even if I didn't specify the currency before handing over the card. In fact I'd do that plus demand a chargeback!

whatyadoinsucka

i refuse to accept these given rates, as its always far worse for my cards.

KvR_2

Des_Von_Devon wrote: »

I have been charged the conversion rate numerous times in Poland when I didn't want it, I now specify that I want to pay in Polish zloty.

Same for me.

Des_Von_Devon wrote: »

I did this tonight in a restaurant called La Grotta near Katowice railway station. The waitress said fine, it had the amount 53.50zl on screen, I entered my pin, and out pops the receipt from Bank Polski:

Amount 11.66 GBP
This currency conversion is provided by eservice S.A.
I accept that I have been offered a choice* of currencies for payment offered by eService and that this choice is final.
I will have no recourse against payment schemes concerning the currency conversion or its disclosure.
I accept the conversion and final amount and that the selected transaction currency is GBP

The same happened to me last week with my German Maestro debit card at Hotel Agros in Ketrzyn, Poland. On the display "AMOUNT PLN 100.00 ENTER PIN ****" was shown. After entering the PIN this was on the Polcard slip:

Exchange rate*: 0.24257
Fee/mark-up: 3.00%
Amount 24.26 EUR
* This currency conversion is provided
by eService S.A.

I have chosen not to use the MasterCard
conversion method and I will
have no recourse against MasterCard
concerning the currency
conversion or its disclosure

The official MasterCard/Maestro exchange rate for that day was 0.23594

zagfles wrote: »

I'd be demanding a chargeback from my bank.

Next week I will go to my bank branch for this.

At a petrol station in Slubice near the German border I requested to pay in Zloty in German language prior handing over the card since it was a two-part payment terminal. On the display of the customer pin input device an amount without any currency indication was shown. It was in Euro! I protested and the transaction was voided. Then, the gas station employee entered the amount again on his payment terminal followed by pressing F2. This time, the zloty amount was on the display. It seems that DCC was preset.

In future I will take a picture of the display with my phone prior entering the pin. In the next event of zloty on the display and euro on the slip I will call the police.

PolishBigSpender wrote: »

Strange. A friend of mine has several PolCard machines, and they always offer the choice of paying in Zloty or via DCC. I know this, because it's their standard procedure to give people choice.

Sorry to say, but that has not been my experience during several visits to Poland. On some payment terminals DCC can be refused by the customer with the red button. In other cases I was never asked and DCC was applied. Since I specify that I want to pay in Polish zloty prior paying it is much better. But it is annoying. This aggressive way of pushing DCC does not occur in the UK or Switzerland.