Comment by andy99
1 day ago
This isn’t that. I understand if you came to a US store with Canadian dollars, they’d be unlikely to give you the posted exchange rate for them, if the took them at all. Here we’re talking about paying with a credit card that will automatically pay in the local currency, and having the POS terminal, on whoever’s behalf, try and intermediate that to charge a higher rate than the credit card would have, under the false pretence of simplifying payment somehow. It’s not convenience, it’s preying on ignorance.
Almost. To such a degree I would call it a very dark pattern.
There is however one very good argument for. Currencies with very high volatility. Think extreme inflation. If you accept their conversion you know what you pay in your own currency. You have then mitigated a risk. If your own currency is volatile then you might gamble and win. If the foreign currency is volatile you will usually win by paying in the foreign currency. If both are volatile then it is a blind gamble.
The important part here are the settlement dates. Your bank usually do not calculate the exchange rate of the eaxct purchase time.
That is the excuse for the "service". But it is still not wanted and I consider it evil.
When traveling places with rampant inflation you will notice that sellers always negotiate 2 prices. One in the local currency and one in what is considered an easy to use hard currency such as USD or Euros. Forgeries and less cash flowing around has made it harder to use other less know but otherwise hard currencies.
So sellers never care what currency you choose to settle in as very close to zero sellers have multiple accounts on the same terminal. And those who really need it will always negotiate in different currencies.
You might have experienced something like this at times when visiting Argentina or Turkey.
So the "service" is only there for those who want to understand what they pay in their own currency or mitigate a settlement date. And will pay for it!
Local terminal holders rarely care. But the ATM mafias (such as EuroNet) do very much so. Because they actively are playing the mitigation game and are allowed to add fees.
I strongly feel this field should be very heavily regulated. But too much money is involved. And if you look at where VISA and MasterCard are located you will understand that is not a regulation happy corner of the planet.
I don’t agree with this.
If you’re in a place that wants dollars or euros because their currency is “bad” (volatile or unable to freely exchange for dollars), they prefer dollars. You can tell because you get a better than official exchange rate.
I have to say I’ve never been somewhere that the currency was so volatile the settlement date mattered. Carrying local currency would be part of your risk? This could only come up in the almost-all-digital-currency modern world.
Historically (like, 15+ years ago when I did the SEA backpacking circuit) there have been some cards with ridiculous fees for international transactions. Like, a flat $10 per transaction. Back then when I saw prompts like this on card terminals I assumed it was targeted at those cardholders (or people who had heard stories of those and were unsure and worried what they would be charged and wanted to be reassured by a number in their home currency)
Just so everyone is aware, it is still considered a foreign transaction regardless of which option you pick. So if you are using a card that charges for that, then you will be charged a foreign transaction fee. It is a foreign transaction fee, not foreign currency fee.
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I think that’s exactly a big part of why this scam was developed. If you aren’t that informed, don’t know your credit card terms by heart, but you’ve heard about those “foreign fees” it’s very plausible that this service would save you money. Not likely of course, since the scam is obfuscated and hidden in a dollar amount presented without the computation.