alt Hacker NewsI 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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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.
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.
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.
Nowadays banks usually allow you to block DCC (dynamic currency conversion) and it is definitely worth it if you travel.
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.