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.

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nebster a minute ago | parent | next [-]

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...

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MarceliusK 5 minutes ago | parent | prev | next [-]

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

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bigfatkitten an hour ago | parent | prev | next [-]

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 an hour ago \| parent [-]
		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

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tiew9Vii 2 hours ago | parent | prev | next [-]

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 an hour ago \| parent [-]
		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.

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scott_w 2 hours ago | parent | prev | next [-]

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.

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bayindirh 3 hours ago | parent | prev | next [-]

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.

	▲	alister 2 hours ago \| parent \| next [-]
		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%.
	▲	einpoklum 2 hours ago \| parent \| prev [-]
		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.

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imp0cat 3 hours ago | parent | prev [-]

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

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alister 3 hours ago | parent | next [-]

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.

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odysseus 2 hours ago | parent | prev [-]

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

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imp0cat 2 hours ago | parent [-]

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).

	▲	noname120 37 minutes ago \| parent \| next [-]
		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
	▲	shawabawa3 44 minutes ago \| parent \| prev [-]
		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)