This isn't anything new though. Been like that for the last 15 years at least. Always pay in the local currency (your bank/visa/mastercard will give you a better rate then the merchant)
It seems to be built into the credit card terminals. So it's a visa thing, not on the shop.
I had that with very small shops in non-touristy areas of Mexico where it was absolutely clear to not be a scam attempts by the shops owner. They had no idea what the terminal asked.
Their payment processor (the people they rent the machine off of) offers them this oppurtunity to 'unlock hidden revenue for merchants'[1][2][3] and they are happy to do this.
I don't think parent is claiming that the shop owner is trying to scam someone. But these prompts have been around for at least 15 years, I'm also sure about that, this isn't new by any measure. And yeah, also came across shop owners who don't know what it is about, and then you have to chose.
Makes sense that shop owners in non-touristy areas haven't seen them before, as you'll only see that when the card has a default currency that differs from the default currency of the terminal.
On the other hand, almost every merchant and waiter in Spain told me, when handing me the card terminal, to select "local currency" (decline the first swindle attempt) then "don't convert" (decline the second swindle attempt). There's obviously some required workflow where they must pass the terminal to the customer, but they are wise to the payment gateway's trick to extract additional value from the transaction. They don't want their customer bilked, or to take the reputational damage when the customer leaves an angry review.
So if your Mexican merchants "don't know" what their terminal says? Either you were their first foreigner, or they're useful idiots, or they know.
I just think they genuinely don't know. I was years into travelling before I learned about this 'trick'.
For my part, I'd just always assumed the charge would be ultimately converted by my bank in any case. Seems obvious now I look back, but I honestly just didn't think about the trick.
Just as an example that gives evidence for this, sometimes you'll go to the same place multiple times and the norm is they ask but occasionally someone won't. So it's not a policy.
I presume the people who don't just don't know about it, don't want to bother me and aren't aware it will make a difference.
He could have merely been the first to do the math and bring it up. I could easily see most tourists overlooking this sort of thing, or not mentioning it because they're already accustomed to it.
Very true, but the other half is to ensure you don’t use a card with a foreign transaction fee, which will cost you 3-4%. There are free cards like the Amazon Prime Visa that don’t have it, but that fee is very common.
The other thing I hate to see is people using the currency conversion desks at airports, or buying foreign currency from their banks in advance of trips. They give you awful rates.
Assuming you’re traveling to a civilized country, just stick your card in an ATM when you land and pull out the cash you need. Good banks don’t even charge their own ATM fee, so your total cost is the $3-4 that the ATM owner charges, and you get a pretty fair rate.
When the ATM withdrawal usually costs you nothing, or in some cases when the bank does not have an agreement with the ATM company it can cost you 1,39$ then 3-4$ is a ripoff.
Also people buy currency locally - before the trip - where I am from, and all the rates are displayed, both in a bank or in currency exchange. You can compare. And even when someone is lazy they can just ask friends which place has the best rates, everybody seems to know which (and the answers are true and conistent, I checked). Buying locally at a currency exchange is the cheapest option.
> The other thing I hate to see is people using the currency conversion desks at airports
If I've just arrived home with $30 left of whatever currency was used in the place I came from, they could be taking a 30% cut and it would still be worth it to just due it there rather than physically visiting a bank.
That is, if the currency is one they're even willing to exchange.
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.
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.
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.
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.
