Paying by card at home country, I was charged in GBP


#1

Hi all,

I was paying in local restaurant in my home country (Czech republic - local currency is CZK).

I have all my resources at my CZK account in Revolut app.

However, when paying the bill, I was charged in GBP.

Is this a bug or was it the merchant that did something wrong when setting up the payment? Or is there some mistake on my side?

Thanks.

Tomas


#2

That transaction went through DCC. Either you or the merchant selected it during the transaction. Happened to me in the Czech Republic too, the waiter was “kind” enough to take the burden off my shoulders and selected on my “behalf” the currency conversion :wink:


#3

Usually you can select the currency when you get charged on the machine. I always get asked which currency I prefer, but with revolut it doesnt realy matter does it?

Anyway not a bug this one :slight_smile:


#4

It matters big time!
If you elect to pay in other than the local currency you in effect allow the merchants bank to decide the currency exchange rate. It shouldn’t surprise you to learn this never works in your favour :worried:


#5

It does not involve Revolut in the first place, it is a DCC issue.


#7

I think this is against terms of terminal provider. They should let YOU choose if to use DCC or not.


#8

It should be you, but what do you want to do? Sue the waiter?


#9

Thx Alessandro, it seems to be right. It’s just unfortunate that it is up to the merchant to pick the choice and you cannot select preferred option in the app. But I suppose it cannot be done.


#10

It actually does matter because choosing GBP mean that DCC is applied and it is no longer exchanged via Revolut but via the card issuer. It cost me more than 5% of the paid value.


#11

Technically it is not up to the merchant but the decision should be yours. Often they take the “liberty” to make the decision on your behalf.

As DCC is something specific to the transaction and not the account you couldnt specify a preference in the application or account-wide, however there were suggestions to prevent DCC by giving the user the ability to block transactions in certain currencies. Unfortunately Revolut does not seem to consider this an important issue.

The principle idea of DCC was probably to give the customer a certain security as to what he is eventually charged, however as the banks chose not to apply the official rate but “invent” some rates the entire concept turned somewhat ad absurdum. With DCC you have a rate guarantee but that guarantee does not only guarantee a fixed rate but also that you pay way more than you’d pay otherwise.


#12

The objective of DCC is to scam the customer for more money. Any other explanations given by disingenuous parts of the card industry are just attempts to justify their malpractice.

See a potential solution to this problem at:


#13

I would argue this is not true, at least not as originally envisioned. Unfortunately in reality it didnt turn into something to give the customer more guarantee as to what he is charged but it turned into a money-maker for the merchant and the intermediary bank.


#14

Even when DCC was in its infancy, it did not achieve the above objective, which is a lie propagated by the disingenuous parts of the card industry that promote it. The first time I experienced DCC was at the Hilton in Dublin in 2002. I was paying with a Visa card issued on a Jersey-based EUR account. Because Jersey cards have a UK BIN/IIN, the hotel detected it as a UK card and automatically converted the amount to GBP with a 2% markup - all without my knowledge or consent. My bank converted it back to EUR with another 2% markup. DCC became prevalent only after EUR notes and coins were first introduced on 1st January 2002, and this transaction was on 2nd January 2002, only one day later. It then happened more and more, particularly in Spain.


#15

I am not sure what you are trying to argue here. The case you described is just plain good old DCC, nothing out of the ordinary here.

I am not a proponent of DCC but I do reckon it could have advantages if it wasnt used in the way it currently is.


#16

The point I am making is that DCC has never operated “as originally envisioned” as you put it. I would further argue that it was never designed to be of benefit to consumers, given that hefty markups were built into DCC-generated FX rates from its infancy in 2002.


#17

DCC goes back longer than to 2002, the Wikipedia article mentions 96. I would also not believe it had anything to do with the introduction of the euro, as a common currency renders any currency conversion obsolete - DCC was way more useful when Europe had 30+ currencies.

Anyhow, I dont think any of us is in the position to exactly say how it was originally envisioned, I’d be rather careful though in alleging it all was drawn up in some shady backroom by some evil overlords whose only goal was to rip off uninformed consumers :wink: - I can easily imagine the original idea was a lot more “innocent”. The fact that nowadays it is mostly used to add a juicy markup is a different story of course.


#18

I’m afraid it’s now my time to be cynical @alessandro :slight_smile:

I doubt that there was much altruism evident, even at the time of the birth of this monster called DCC.

I’ve seen some of the marketing materials to merchants issued by the card issuers, and the rationale from very early on was in fact that DCC would generate ‘extra’ profits for merchants.

It was naturally camouflaged nicely as a ‘service’ to consumers. But the motivation went far beyond kind benifiscence towards consumers.


#19

Very good point, @Doppjunat. See this DCC marketing material for merchants by Lloyds Bank in the UK, which states:

Benefits for you
• Profitability – guaranteed commission on every converted transaction


#20

To be fair, that document does not seem to be 20 years old. But it does show quite well what DCC came to be in the meantime. Out of the eight benefits listed effectively only the very first one is a valid argument. Everything else is fillers

improved customer experience

Oh really?

exchange rate is guaranteed at the time of transaction

Perfectly aware of it - guaranteed pricier