Ach Transfers From Us Bank Account To Bangkok Bank

[Pib]

BTW, you mentioned the dynamic surrency conversion of withdrawals for counter withdrawals at SCB.. I wonder if they might be doing that only for MasterCard logo cards and not for VISA logo cards because I haven't encountered DCC from them, they've been given me the same rate as an ATM machine would (without the 150 baht fee). Some SCB branched do refuse to do it though. The whole DCC thing seems pretty strange to me, are there actually cases where the consumer from it? SCB advertises it pretty heavily as being good for customers and a number high-end hotels in Bangkok will try to slip it it on you while you're paying your bill. Seems like a straight-up case of consumer fraud to me. Are there certain cards from certain countries that give a lower exchange rate than DCC, making DCC a good value under some scenarios?

At least two benefits to DCC, some customers get a warm fuzzy in knowing what the charge amounts to in their home country currency (guess it makes them feel like they are just charging something at home) and the merchant gets to make a nice, fat little profit usually in the 3-4% range with the lower exchange rate. Of course, most customers don't want to take the time to look at the small print on the receipt they are signing as to the exchange rate they are getting nor knowing what the approx full exchange rate is for the day....and some customers just don't want to make a scene/take the time to say cancel the DCC and instead charge me in Thai baht. And some customers just don't seem to have a clue about any extra charges/fees related to their credit/debit cards. You usually see DCC being used frequently in tourist locations where the customer is less likely to worry about such DCC charges (ripoffs) since they are already getting hit by hotel taxes, airport taxes, rent-a-car taxes, tax XYZ, etc....guess they assume it's just part of the vacation cost.

Now for me, when a merchant attempts the DCC thing on me, I get a warm fuzzy in telling them to cancel/void the transaction and redo it in Thai baht only...then I will sign the receipt. It takes the sales clerk a few minutes to cancel/void the transaction and redo the transaction, usually missing that Thai smile, but as I said it sure makes me feel good not to have been ripped off. A DCC transaction against my credit card has been attempted three times over the last few months, and each receipt they hand me to sign had the baht amount, home country amount, and exchange rate of the DCC...I immediately tell them to cancel/void and redo in Thai baht. Hard for me to see any case were DCC is of a benefit to the customer. I stay abreast of the TT exchange rate simply by seeing the TT rate in the upper right hand corner of ThaiVisa pages and in other media sources, so I immediately know approx how much the DCC is providing in a lower exchange rate...each case it been around a 3.7% lower rate.

Yeap, gives me a warm fuzzy to just say no to DCC!

[jfchandler]

Thanks for the follow-up and very good info... OP...

In recent TV thread on AEON and their no fee-ATM withdrawals, another TV member was talking about counter withdrawals as being simple, easy and no fee alternative... And I replied that they might be...and they might NOT be... depending on what home country card you're using, and what Thai bank you happen to wander into..

Indeed, quite a few other TV members have posted on trying to do counter withdrawals, and being turned away by the bank staff inside and being told to go outside to use the ATMs...which of course charge the 150 baht fee. So your experience about that isn't unique. Some branches will do them... Some won't. It's a hit and miss kind of thing... It doesn't appear to be a policy thing at the company level, where all the branches of one bank will but all the branches of another bank won't. TIT, after all.

As for Dynamic Currency Conversion, indeed it did first surface to our attention here with Bank of Ayudhya ATMs, where they began doing DCC on ATM withdrawals where it was a MC logo card (not VISA) denominated in U.S. $ or Euros.... but not UK pounds, as best as I recall.

I'm not sure how SCB's ATMs handle that issue for foreign cards. I've rarely made foreign card withdrawals from SCB since they started charging the 150 baht fee more than two years ago. Though I did happen to have one a month back with a VISA debit card that reimburses the 150 baht fee where the exchange rate, when I go back and try to reconstruct it, seemed a normal (not reduced) one. I can't speak to whether the same would occur with a MC logo card.

TV member Jim Gant is the person I consider to be our resident expert on DCC things... But I do seem to remember a discussion here when the 150 baht fee first began, about people looking to SCB because they had a VERY high limit allowed on counter withdrawals.... But it turned out to be a negative, as best as I recall, because we figured out that SCB was indeed applying their lower DCC rate on those counter withdrawals... At least that's my best recollection of a discussion here two-plus years ago.

[jfchandler]

Ya, to followup on Pib's post above, there are really three different flavors of DCC.... one involving ATM withdrawals, one involving counter withdrawals and the other third POS transactions...

The use of DCC in Thai bank ATM withdrawals appears to remain pretty limited, such as the Bank of Ayudhya example I mentioned above. To what extent it's occurring at ATMs beyond that, I don't know.

Likewise, there hasn't been enough detailed posts here from TV members on bank counter withdrawals that I've seen to get a good picture of the extent to which DCC is occurring in counter withdrawals. But just to be clear, when your home bank or CU charges you a 1% card network fee, that's not DCC... It's DCC when the Thai bank you're doing the transaction at uses their own lower baht-$ exchange rate instead of the VISA/MC networks rate.

Then there's the POS use of DCC. Those, I'd say, are the easiest to spot...because as Pib recounted above, you're getting DCC'd on POS (Point of Sale) transactions anytime you see the credit card/debit card charge slip showing the total in your home country currency.... instead of in Thai baht. So if the merchant hands you a slip to sign that has the total printed in U.S. $ in any way...even along with a smaller translated total in Thai baht, you can know you're headed for getting screwed...

Politely hand back the credit/debit card slip to the business' staff member, and ask them to re-ring the transaction in Thai baht... AND... make sure they VOID the original home country currency charge...so you don't get double-billed.

[jfchandler]

Are there certain cards from certain countries that give a lower exchange rate than DCC, making DCC a good value under some scenarios?

That's an interesting question, and it's one that I don't know the answer to...

There are any number of major U.S. banks and credit card issuers that have foreign currency surcharges on ATM and POS transactions made abroad that are as much as 3% or more.... Most of the time, they're not setting their own exchange rates... They're simply letting the VISA and MC networks handle the international exchange at those networks' own rates, and then the home country bank hits you with the flat 3% or whatever surcharge based on your total...

What I don't know is... if someone happens to do an ATM withdrawal where the Thai banks uses DCC or a POS where you accept DCC by agreeing to pay in home country currency... in those situations, would the home country bank still assess the 3% or whatever surcharge...

My guess is they would...because I remember reading language about the foreign currency surcharges about applying to any transaction made outside the U.S. And sometimes even inside the U.S. if the vendor is a foreign entity... But I must admit, that's an issue I haven't really considered in detail before. Time to pull out those tiny print bank terms and conditions documents...

[Pib]

What I don't know is... if someone happens to do an ATM withdrawal where the Thai banks uses DCC or a POS where you accept DCC by agreeing to pay in home country currency... in those situations, would the home country bank still assess the 3% or whatever surcharge...

This website indicates the bank foreign transactions fees(s) are still applied for a DCC transaction. Link

On he left side of the page you can select various banks as to their charges, although I don't know how up to date the charges are...some seem kinda low to what I heard recently.

[jfchandler]

That's an interesting site, Pib... Never seen that one before... Thanks for finding and posting it...

The info you linked to above reinforces what my presumption was.... DCC isn't a way of escaping a home bank's foreign currency surcharge.

Here's an interesting excerpt of a blog post on that site that's exactly on point...though it's dated from 2006:

Although the fee varies from merchant to merchant, the typical fee applied for DCC service is usually between 2-4%. Click here to see a sample receipt where the customer choose to use DCC. IF the fees stopped here, DCC would allow travelers achieve an exchange rate and fee similar to what some credit card issuers would charge. Additionally, they would have the advantage of seeing what the total amount charged at the point of sale rather than waiting for their credit card statement to arrive in the mail. Unfortunately, rather than give up the fees that easily some credit card issuers have taken to charging transaction fees even after DCC is chosen. Unassuming customers (thinking they know the total amount for a purchase) will be charged even more fees when the transaction comes through on their credit card statement. These card issuers even changed the name of their fees from "foreign conversion fees" to "foreign transaction fees." Common explanations from the guilty credit card issuers include asserting that foreign card users require more services than regular card users, such as an international phone number to call. However, most analysts agree these fees do not reflect actual costs. Furthermore, not all credit card issuers charge the fees.

Below are a list of credit card issuers who add additional fees after DCC has been applied. The total fee added by the card issuer is listed after the issuers name.

Offenders:

• Bank of America: 3%
• JP Morgan Chase, Bank One, First USA: 3%
• CitiBank: 3%
• HSBC: 1%
• MBNA: 3%
• US Bank: 3%
• Washington Mutual: 1%
• Wells Fargo: 3%

Furthermore, unless the fee is refunded by the issuing bank, all cards issued by Visa or MasterCard will also have up to 1% of fees added by Visa or MasterCard after DCC.

Customers of one of these companies have limited options. As consumer awareness increases some of these companies may revise their policies, but this will likely only happen if consumers make their voices heard. Consumers are faced with two primary options: writing offending companies to complain and cancelling the cards of companies with double fees. We've included contact information for many of the credit card companies listed above in our directory of credit card contacts.

One notable exception to the companies listed above is Capital One who actually refunds the fee that Visa charges. Additionally, Discover Card and American Express do not allow DCC fees to be added. Like Capital One, Discover Card charges no fees for international transactions.

http://www.travelfin...posed/#more-128

BTW, that final reference to Discover credit cards, written 5 years ago, apparently is no longer accurate... The Flyers Guide says Discover credit cards, today, charge a 2% foreign currency fee on POS... That web site also notes of Discover cards: "Accepted only in North/Central America, the Caribbean, China, and Japan."

And I see the 2% charge confirmed by Discover's own credit card web site terms and condits:

https://www.discover...nd=MORE&sc=KA3U

Here's Discover's web site for international acceptance... forget Thailand... not now... not coming soon:

http://www.discovercard.com/customer-service/account/international.html

Edited May 6, 2011 by jfchandler

[Pib]

Just from some googling, link after link basically said the same thing: any "foreign transaction fee" charged by the bank/card is just added on top of a DCC lower exchange rate.

Seems banks/cards now use the "foreign transaction fee" name versus the old name of "currency conversion fee", because with a DCC transaction there was no currency to convert when the transaction hit the home country bank and banks didn't want to be left out in the cold with no fee. Since DCC is used more and more now days, the banks/cards renamed the fee to "foreign transaction fee," adjusted their policy on when to apply the fee, and the fee applies to "any foreign transaction," whether Visa/Mastercard/bank did the currency conversion or did not do any currency conversion if it was a DCC transaction.

Summary: do a ATM/debit/credit card transaction (DCC or not) outside your home country/zone and many banks will charge a foreign transaction fee, unless you have a no foreign transaction fee card.

[jfchandler]

Re the issue of whether banks will charge their own foreign transaction/currency fee on purchases made abroad where the merchant already is using Dynamic Currency Conversion to ring up the purchase in U.S. $ (at a substantially lower exchange rate):

Here's a good example from HSBC USA's terms and conditions language of how, yes, they do exactly that, double charge you if the merchant has done DCC on the purchase.... In this scenario, you might end up paying a premium to the banks of 6-8 percent above your nominal purchase price, considering that HSBC alone has a 3% foreign fee, apart from whatever cut the local bank takes with a lower exchange rate.

You gotta love these guys... Just how exactly does a "currency conversion" occur post purchase on the HSBC/card networks end if the purchase has already been converted into dollars at the Thai bank's end???

Foreign Transaction Reminder**

If you effect a transaction with your Debit MasterCard®, ATM card or your MasterCard® or Visa® Credit Card in a currency other than U.S. dollars or effect a transaction in U.S. dollars outside the United States, MasterCard International Incorporated or Visa as applicable ("Card Association") will convert the transaction into a U.S. dollar amount. A currency conversion will occur even if the transaction is made in U.S. dollars.

https://www.us.hsbc.com/1/2/3/personal/online-services/oao/oao_disc#disc3

[OriginalPoster]

Re the issue of whether banks will charge their own foreign transaction/currency fee on purchases made abroad where the merchant already is using Dynamic Currency Conversion to ring up the purchase in U.S. $ (at a substantially lower exchange rate):

Here's a good example from HSBC USA's terms and conditions language of how, yes, they do exactly that, double charge you if the merchant has done DCC on the purchase.... In this scenario, you might end up paying a premium to the banks of 6-8 percent above your nominal purchase price, considering that HSBC alone has a 3% foreign fee, apart from whatever cut the local bank takes with a lower exchange rate.

You gotta love these guys... Just how exactly does a "currency conversion" occur post purchase on the HSBC/card networks end if the purchase has already been converted into dollars at the Thai bank's end???

Foreign Transaction Reminder**

If you effect a transaction with your Debit MasterCard®, ATM card or your MasterCard® or Visa® Credit Card in a currency other than U.S. dollars or effect a transaction in U.S. dollars outside the United States, MasterCard International Incorporated or Visa as applicable ("Card Association") will convert the transaction into a U.S. dollar amount. A currency conversion will occur even if the transaction is made in U.S. dollars.

https://www.us.hsbc..../oao_disc#disc3

Re "Just how exactly does a "currency conversion" occur post purchase on the HSBC/card networks end if the purchase has already been converted into dollars at the Thai bank's end???" -- are you sure that there are no more conversions that occur after the DCC stage? I thought that Thai banks/retailers in Thailand could only bill Visa in THB, meaning that if a merchant in Bangkok rings up a sale is USD it's going to get converted back to THB again so that they can bill VISA, and then converted back again to USD when the funds come back to the US.

[jfchandler]

It raises a bunch of good questions, OP. And I don't know the answers...

But I do know this... If your scenario is correct, then DCC is more of a scam than I even thought.

In the case of HSBC, I believe their 3% foreign fee basically breaks down as 1% charged by the card network and an additional 2% charged just by HSBC... Though I'm not entirely sure HSBC doesn't take 3% for themselves and then pass along the card networks 1% fee via their own lower exchange rate.

Other than scamming, what's the possible legitimate point of first doing the transaction in U.S. $ here via DCC, and then having to convert back to baht when it goes to the card network, and then having the card network convert it back to dollars again before it reaches HSBC USA, where they tack on their own fee for good measure....

If that is the route the money follows, then there is no legitimate reason for DCC here.... However, I don't believe we do know the actual route the money follows when it starts out as a DCC purchase.

But either way, the consumer is getting double charged....first via the lower DCC exchange rate, and then again by the home bank's foreign fee....even on purchases nominally made in U.S. $ outside the U.S.

[Pib]

Here's a good example from HSBC USA's terms and conditions language of how, yes, they do exactly that, double charge you if the merchant has done DCC on the purchase.... In this scenario, you might end up paying a premium to the banks of 6-8 percent above your nominal purchase price, considering that HSBC alone has a 3% foreign fee, apart from whatever cut the local bank takes with a lower exchange rate.

Now days when I think of the word bank my brain immediately pulls up the definition of: Fees-R-Us. And since the mortgage loan and investment banking bubbles burst a couple years ago, it seems banks have focused on making up lost income by raising fees, modifying current fees, creating new fees, etc. Now some banks ain't too bad in fees relating to anyone who manages their money effectively (that's the banks I look for) but it seems other banks go after all their customers in the bank's fee structure. Yeap, Bank = Fees-R-Us.

A person really needs to fully understand fee structures associated with their bank accounts, ATM/Debit/Credit Cards, etc; otherwise, they just merrily continue to go skipping along the money path with money being picked from their pockets by the banks. Worst yet are the ones who know the fee structure, know of the high fees, but continue to pay the high fees. Just don't know what to say about folks like this. Preaching to the choir I know.

Edited May 8, 2011 by Pib

[Pib]

Somehow by surfing around the Bank of America site I found a page that was very specific in saying even if the foreign transcation is in U.S. dollars (like a DCC transaction), Bank of America still applies the foreign transaction fee. See this Link, and in case the link don't work for you below is a cut & paste from the page...notice the last sentence

Quote:

The exact fee

It's difficult to publish the exact fee because there are various factors involved. It depends on which credit card you have and the amount of your transaction. Foreign Transaction Fees are calculated as a percentage of the total transaction amount. We recommend that you call the number on the back of your credit card to discuss these issues before you travel or before you make an online or phone purchase from a merchant in another country.

Generally, the fee is 3% of the transaction amount. For example:

• You make a foreign purchase worth $80 (USD)
• The charge is 3%
• You will pay a $2.40 (USD) foreign transaction fee

You should also be aware that even if a transaction is in U.S. dollars we apply a foreign transaction fee if it is processed outside the U.S.

End Quote.

Edited May 8, 2011 by Pib

[jfchandler]

Perhaps there's some justification for it.... but I don't know what it would be....and I haven't heard or seen it as yet...

Folks also might consider the more basic question in line with Pib's post above:

If the card networks are doing the currency conversion and taking a 1% card network fee off the top for doing so, and then passing along the debit/charge to the U.S. bank in converted U.S. $ amounts, what reason/explanation does the U.S. bank have (whether it be HSBC, BofA or others) for tacking on an additional 2% on top of the VISA/MC network fee? Or, in another way of looking at it, charging a fee that's double the card networks' rate? For doing what exactly???

I've seen some writeups that talk about DCC as being intended originally to give traveling abroad purchasers a clear, immediate picture of the cost of their purchase in their home country currency amounts, albeit at a reduced exchange rate offered by the foreign bank.

Yet now, that doesn't even apply, because whatever price you pay and know in U.S. $ at the point of sale where DCC is done is then going to have added another 3% or so by your home country bank that's above and beyond the amount you've signed for at purchase.

So basically, IMHO, the whole thing is a big crock of S**T.

[Pib]

And on that big crock of S**T, the following words are engraved just below the bank's name: Fees-R-Us.

[lopburi3]

I really seems to have been an attempt by foreign banks to get a piece of the action in that they billed in your foreign currency so there should not have been the normal currency conversion fee imposed by home bank. But home bank wants that money and instead of treating it as a normal transaction changed the wording to foreign transaction fee and kept the full amount for themselves and if DCC used you get both the lousy exchange rate the foreign bank offers (as there charge to bill in your home currency) and the original high fee your home bank changes. This has only happened to me one time (BBL and major hospital many years ago when under extreme anxiety) - my current hospital does not try to pull this stunt.

[jfchandler]

Lopburi, that's one of the kind of strange things about DCC in Thailand.... That is, there seems to be no particular pattern for where it shows up in POS purchases (although some members in Pattaya say Sizzler there does it every time...)

In other words, POS DCC doesn't seem to be solely related to one Thai bank or banks....

I have had a number of situations, though, where some merchants (most recently, a hotel upcountry and then a restaurant at the Pullman Hotel in BKK) handed me charge slips with DCC processing.

In both cases, I saw it and handed them back, and told them to re-ring the transactions in Thai baht... And in both cases, they did, though after a fair amount of delay in both cases...

In the hotel episode, the desk clerk originally tried to claim that (DCC) was the only way she could handle the transaction.... but later relented and, after consulting her credit card machine instructions sheet, did it perfectly fine in baht.

In other words, it's a snake that comes out of the grass every so often, so you gotta keep an eye out for it.... because invariably someone will try to sneak it in when the person isn't looking.