Hatunen wrote:
> How does one make a foreign transaction in the US while in the
> US?
The link to the Washington Post article explains it. It's called
"Dynamic Currency Conversion." The merchant's point of sale terminal
does the conversion from local currency to dollars, and you're given a
receipt that indicates the purchase total in $US. It's only when you
compute the exchange rate (if you even remember the price in local
currency) that you realize that you've been charged an exchange rate
that's about 4% worse than the true exchange rate. In the case of DCC,
Visa wasn't getting their 1% because there was no currency conversion
being done by them, it was all done by an intermediary between the
merchant and Visa. Needless to say Visa wasn't happy about losing their
1%, and they are now changing the terms to charge 1% based on the
merchant's physical location, rather than charging 1% based on
converting the purchase from foreign currency to $US. I suppose this
also means that charges in countries that use the US dollar as their own
currency will now have the 1% fee as well, even though no currency
conversion is taking place. |