[alister]

I want to mention another infection happening at payment terminals and ATMs if you're using your credit card in a foreign country: You get a message saying "Would you like to pay in your own currency? Click [Accept] or [Decline]", and there's fine print that says there's a 12-15% currency conversion markup.

To give a concrete example, if you're an American traveling in Brazil withdrawing cash from an ATM or buying something for BRL 500, you'll be presented with an option to pay BRL 500 or pay just US$110.58 in your own currency (with text saying conversion includes 15%).

But the typical American (and Canadian) credit card adds at most 2.5% to the Visa or Mastercard exchange rate, which is at most 0.5% higher than the interbank rate. So basically by clicking the wrong button, you're paying an extra 12% to the payment processor. In the example above, your credit card would have charged you about US$99.04 had you declined the conversion, and saved you $10.

I can't imagine a situation where it's to your benefit to accept the "conversion service" they're offering. I wonder if the payment processor is kicking back some of the profit back to the merchant because this swindle is spreading everywhere.

The worst part is that a couple of people that I've tried to warn don't get it. They still think that they should pick US$ (or whatever their own currency is) because that's what their credit card uses.

[nebster]

Some are even worse than this. When I was in Portugal, the machine said "Press (1) for GBP. Press (2) for EUR.", then on the next screen, after you select "(2) for EUR", it says "Rate will Apply. Please confirm. (1) Accept conversion (2) Reject Conversion". If you select "Accept conversion", it overrides your currency decision and you pay in GBP with their markup fee...

It's a complete con...

[BrandoElFollito]

Oh, that one is weird.

I see this feature in Poland. The choice is clear. Or there is no choice and it is paid in local currency.

[stavros]

I saw the same in an ATM in Greece. The first screen wanted me to let them convert the currency (at a 20% markup), I declined, and the second screen said "are you sure? You might be charged a lot" and had "accept" and "decline" where the small print said "do you want us to convert anyway?".

It was really scammy and I almost fell for it.

[lotsofpulp]

That one is not weird. There is an intent to deceive, so it is fraud.

[SirMaster]

This happened to me, but it was the merchant that clicked it...

I inserted my card, and then was reading the text and choice that popped up on the screen, and while I was reading it trying to decide which I should click, the merchant grabbed the scanner and clicked the accept...

Of course I got a charge notification on my mobile app immediately and noticed that it was way higher than it should have been, so then I had to go back to them and get them to refund the transaction so we could do it again which took forever and a manager etc etc.

[fxtentacle]

I've also learned that it is a good idea to physically put my hand around the payment thingy to make sure I am the one pressing the buttons.

[tianqi]

Currency conversion is not only incredibly fraught with traps, but believe me, even for very intelligent and research-savvy individuals, if you're not a professional in this area, you'll struggle to see all the pitfalls and still fall for them. I don't consider myself stupid, but I spent several days seriously researching it, and ultimately, after being exploited by several new tricks, I gave up. I consider those losses as a part of travel expenses and avoid letting it amplify my losses, that ruining my travel. PayPal is even more blatant fraud. You never know how much money is left after a transfer or withdrawal until you're surprised, and then they'll say they mentioned it in some tens of thousands of words of agreement that they would deduct this amount.

[imp0cat]

Nowadays banks usually allow you to block DCC (dynamic currency conversion) and it is definitely worth it if you travel.

https://en.wikipedia.org/wiki/Dynamic_currency_conversion

[alister]

Thank you for telling me what it's called!

On the positive side, it seems that Wise must block it because I never see the DCC "choice" when using a Wise card.

As a negative point, I've noticed that AirBnB, which used to use reasonable conversion rates, has just recently started to use exorbitant currency conversion and not allow you to pay in the local currency of the country you're traveling to (so you can let your own credit card do the conversion at a lower rate). I.e., if you try to book a property in Brazil in BRL (literally clicking on the price to pay in BRL), the charge will nevertheless go through in USD (or whatever currency is your own) with AirBnb doing the conversion at the rate they choose.

[londons_explore]

Aliexpress also shows prices in one currency but then refuses to take payment in that currency and does their own conversion with an unfavourable rate... Seems to be allowed with some combinations of delivery country and currency but not others.

[netsharc]

I have a European currency (not Euro) and I think being charged their USD price is better than my local currency's.. I pay with Revolut and what Revolut charges me (taking my local currency and converting it to USD), is lower than what AliExpress would charge me if I had chosen to pay them in my currency.

[direwolf20]

So they charge you for an amount different to advertised? Tell your bank. You might get a refund and at least they'll have the complaint on file so the next victim might get a refund. If enough people complain and AirBNB don't fix it, AirBNB gets banned from accepting cards.

[odysseus]

Where do you block it? I don’t see an obvious option at any of my banks or that article.

[imp0cat]

It is usually an option in your bank's app. It depends on the bank though, obviously. If it's not there, you have to be vigilant while using your card (always select the local currency when given the option).

[shawabawa3]

I checked and it doesn't look like any UK banks have this option - at least I looked at about 5 different banks websites and all have pages suggesting you always select to pay in local currency but none of them have any information on disabling this behaviour

Gemini confirms it's not a thing, and not really possible (the terminals just detect the country from the card number)

[noname120]

I don’t know a single bank in Europe that provides this option

Edit: Perplexity says this:

> cards cannot block DCC offers because the merchant terminal identifies your card’s country of origin from the card number and offers DCC accordingly. Always manually decline at payment to let the card handle conversion at better rates

[embe42]

My bank (mBank in Poland) has per card options for declining various types of transactions, among others: made using the magnetic strip, with DCC, with added ATM surcharges. The bank probably cannot disable the "service" offered by the terminal but seems to get enough information to be able to decline the transaction.

[Symbiote]

A charge in zloty from outside Poland probably shows DCC has been used.

[paranoidrobot]

A few years ago I was checking out of a reasonably up-scale hotel in Barcelona early in the morning.

They punch numbers into one of those wireless hand terminals. I tap my card, enter the pin and then before I can react to what the screen is now saying they've punched the 'Accept Conversion' button and submit it. By the time I realise what has happened, it's too late and has started printing the reciept.

I insisted they reverse it and redo the transaction without that - the staff didn't understand and didn't care they'd cost me another 10-15%. It really adds up for a week long stay.

[lowkj]

I once asked a cashier about this and they said it saved me money. They said representatives from the large national bank had done a presentation and noted how this is the best option for foreigners. I think they truly believe they are being helpful. Closest thing to legalized robbery.

[OkGoDoIt]

I had the exact same thing happen to me at a hotel in China. I could not get the person at the checkin desk to understand the problem so I ended up having to just eat the extra cost. Very frustrating, it was not a small amount of money.

[Panzer04]

What the fuck? Why are they tapping the terminal before you've confirmed the transaction?

[jerlam]

In my experience, staff will do this if they are pressed for time, or when tourists don't know how to read or operate the payment systems and linger.

[nerdsniper]

Well, it’s an unwise strategy to use on me if they’re feeling pressed for time. I will get enjoyment from putting my foot down for as long as is needed to reach a resolution.

That’s a 20+ minute decision they just made to try to save a few seconds.

[bigfatkitten]

PayPal does this too. They will offer to do the currency conversion at an outrageous rate. Not quite 15%, though always substantially more than Mastercard’s rate of the day.

[tetris11]

Amazon does something like this too, though I'm not sure of the percent. I just know that every time I select to pay in dollars, any change in delivery options will select it back to pay in euros, where the bank is.

I genuinely don't know if this is good or not, but the UIs insistence on reverting back to another currency after my initial selection leads me to believe that my initial selection hits them the hardest the most

[account42]

Amazon.com does add a ~2% "currency conversion guarantee" fee when paying in EUR, on top of whatever conversion they use. I imagine that the average cost of that "service" to them is closer to 0%.

[spicyjpeg]

The even worse part about PayPal is that they have a whole system of nonsensical fees to fall back to when you inevitably figure out how to evade the obvious ones. For instance, sidestepping their dynamic currency conversion by temporarily changing which currency they bill on your card (which by the way is rate limited to only a few times per month) will result in another "non-foreign transaction but with recipient in foreign country" fee appearing, covering the inherent costs of converting German US dollars to American US dollars or whatever. They will at least hide the fee from you for business transactions, but the merchant still has to pay it.

[ornornor]

That’s 100% a US problem. Never had this issue in the EU, PayPal etc are obligated to offer the option to “just bill in transaction currency and let the card issuer handle conversion etc” without fees.

[tiew9Vii]

Speaking of payment terminals.

Payment terminals used to have good UX, they all clearly showed you the price when paying. Tills had displays with the price facing the customer which were clearly visible.

Now traditional POS terminals have been replaced with tap and go devices by the latest fintech, non of them show the price to the customer by design. Instead you tap a small puck and you hope the price charged is the one asked only to find a transaction fee on top when later check your balance.

It's a deliberate design choice to withhold showing the price on these devices. It's cheap to add a small LCD panel to them, the technology previously existed and still exists however the choice have been made not to.

[willis936]

I was in awe of an old vending machine I saw in the Caribbean recently. I didn't want anything but I spent a few seconds just pushing buttons to check prices. The segmented display read out the price the very instant I touched the button for the item. There was no perceptible delay for a bloated software stack running on some cheap processor that waits for too many bits over a crappy cellular internet connection. Everything needed was right there, between the hard-coded logic and me.

[friendzis]

> Instead you tap a small puck and you hope the price charged is the one asked only to find a transaction fee on top when later check your balance.

I'm sorry, but it's a mandatory knee-jerk response here: "Is this something I'm too European to undestand?"

Even the the smallest, crappiest devices are required to have a line LCD to show the final price. Goes to show that consumer protection minimums do really set the bar for eventual exploitation.

[tiew9Vii]

It may be geographical.

In Australia, a lot of places only have a "Square Reader" on the counter where you pay. i.e. cafes, coffee shops, convenience stores, market stalls.

Terminals do exist with full displays but they are less common, mainly if you go to a restaurant as they have options for tipping on the display.

Just looking at the Square website the "Square Reader" is $69 vs $329 for the "Square Terminal". This may be part of the reason cafes etc prefer them given tight overheads.

Square reader: https://squareup.com/au/en/hardware/reader

[friendzis]

> It may be geographical.

Yes, I'm referring to European directive mandating final price displays on terminals.

I think this would be the simplest reader one can legally use in Europe https://www.sumup.com/en-au/air-nfc-card-reader (although European market sites do not even list this model anymore)

[jabroni_salad]

I think your retailer has misconfigured their setup. Everywhere I tap against a puck, it is also accompanied by a screen. The puck is always just a plugin module as opposed to being integrated on the terminal.

[bayindirh]

This was being asked as long as I remember (~15 years now?) but the conversion commissions were around 2%-5% at most. 15% is egregious.

[einpoklum]

2% is already excessive and 5% is quite egregious.

Plus, the point is that you're asked whether you'd like to pay more for something, where there is no benefit in it for you nor a public benefit etc.

[alister]

At least in Brazil, it was very rare. In the last 3-4 years, it's almost every time you pay. And you have to grab and hold the payment terminal (especially if you're using tap / contactless payment) so the cashier or waiter, trying to be helpful, doesn't click the wrong button and cost you 15%.

[londons_explore]

> trying to be helpful

Some places they're insistent that you must do currency conversion or the payment won't work. Makes me think the merchant must be getting a chunk of that profit and telling their staff to accept the conversion...

[bayindirh]

Another more benign reason possibly be the customer's card might be closed to different-currency transactions.

For example, I can choose my bank to do the conversion at the time of purchase, or pay with that currency when the invoice comes.

[fn-mote]

> Makes me think the merchant must be getting a chunk of that profit Yes, they are. (No reference handy.)

[scott_w]

As others have said, currency conversion has been a well-known "scam" for as long as I can remember. I'm sure Martin Lewis has been talking about this since at least the early 2000s in some form.

[BrandoElFollito]

The rule is always "pay with local currency"

We have the same thing in Euroland

[stavros]

Here in Greece it always asks "Euro or USD?". Most merchants know to press Euro, the rest ask me. I think I've maybe had one merchant press USD by accident in ten years or so.

[account42]

Exactly, who has more incentive to rip you off, your bank or some random merchant/payment processor/local bank that you are probably never going to interact with again either way.

[wombat-man]

They seemed to have given up on this in some areas. I don't think they asked me this once during my visit to France in October. This included Paris and smaller towns.

[MarceliusK]

The fact that people don't believe you when you explain it just shows how effective the framing is

[account42]

When you think about it, it's just another "Tourist tax" of which are are many. Other times you just get quoted a different base price as a tourist vs. native - openly or not.