Why Doesnt "Me Too" Apply to Democrats?

[JimGant]

Visa/Master don't lose anything if the DCC (dynamic currency conversion) is used. But in fact they make less money if it's used.

? First sentence is correct. Second contradicts the first, and is in fact incorrect.

If 30bt to the dollar is the advertised DCC exchange rate, then, yes, you'll know with certainty that your issuing bank account will be docked for $333.33 -- plus any percentage network and issuing bank foreign transaction fees -- and any flat fees, if applicable. If your issuing bank 'eats' the Visa/MC fee, and has no fees of its own, then $333.33 is your final bill.

Look at this site:

Flyerguide

Go to Citibank. Note the 3% charge, plus flat fee of $2. Also, in the notes for Citibank, "3% fee also applies to charges in USD made outside the USA." Inclusive in that statement is, of course, 3% also applies to non-DCC charges, i.e., charges made in the local currency.

Well Fargo/Washovia is even worse -- 3% plus $5.

If you make a credit or swiped debit charge (POS) under DCC, on your US statement you'll see this single-line charge in dollars at the then DCC rate. Plus, you'll see the foreign transaction fee noted somewhere on the statement (on my USAA statement, it's broken out at the bottom). For those only passing-on the Visa/MC fee it will be 1% -- but 1% of the less-favorable (to you) DCC conversion rate, meaning you're paying a higher dollar fee than otherwise -- and Visa/MC are realizing this higher fee, meaning they get 'richer' under DCC. So, it's to their benefit -- and probably why they haven't squashed this ripoff to the consumer.

If you make a purchase in the foreign currency, and not DCC, a second line item on your statement will reflect the foreign currency amount. So, if you're not seeing this second line right under the converted home currency line, this means you've been duped into paying DCC rates.

I've never done an ATM transaction under DCC, so the above is what I've seen only on my credit card statement. But, the mechanics are similar, so I would suspect I'd see same or similar for ATM transactions.

So, all the fees on the issuing bank end don't change under DCC (and, as shown, are actually higher in absolute terms due to the less favorable conversion rate). On the Thai end, if the example above has 30bt as the per dollar DCC rate, then this means the interbank exchange rate (IER) is something like 30.25bt to the dollar. And this is the wholesale rate used between financial institutions -- so your $333.33 shows up in Thailand as 10,083.23 baht. And this 83.23bt profit is shared between the servicing bank and the ATM owner. And, since we're into percentage, a 25000bt withdrawal, under the same criteria, would result in a profit/gouge of over 208 baht -- making the 150bt flat fee an also-ran.