Beware of the DCC...
The perfectly legal scam that banks and other travel product players don’t want you to know about.

BLOG / FEBRUARY 14, 2018

If you search online for the top tourist scams and rip-offs, you’ll find heaps of websites listing common street scams such as fake police who try to steal your identity, and the ‘helpful local’ who is actually trying to guilt you into buying something. Unmetered taxis, getting short-changed and the organised business behind begging are also listed as top ways tourists get ripped off. We think it’s funny that one of the most common travel ‘scams’ isn’t on any of these websites… Dynamic Currency Conversion (DCC).

DCC is pretty simple but also pretty confusing (so bear with us). Say you’re an Aussie in London having a nice meal with some friends at the local pub. You go up to the counter to pay for the meal, you put your card in the POS Machine and it asks you whether you want to be charged in AUD or in GBP. You’re rattled, but you choose to pay in Aussie dollars, because it’s what you know, you’re on a budget, and want to know how much you’re spending.

Now here’s where DCC screws you over… Because you chose to pay in AUD, the card terminal converts the purchase from pounds to AUD on your behalf with an exchange rate that is virtually guaranteed to be awful (usually around 3–4%).

An additional fee is then usually charged on top of the fx margin meaning the total DCC fee can sit at about 5% or even more.. This would take a $100 purchase up to $105 in a matter of seconds! When you are making multiple transactions every day, these DCC costs can and will add up.

The frustrating part of it is, if you have ever pressed the “pay in AUD” button, you have been unknowingly choosing to rip yourself off. It seems counterintuitive to pay in the local currency, as you would assume this adds on an additional FX fee. Banks and travel card providers prey on this logic, and purposefully don’t educate their users on DCC. Why? Because they are making millions from it.

Everyone of us at Pelikin has been stung by this cheeky stunt while travelling abroad, which fuels our determination to drive both consumer education (so Aussies become more savvy while spending abroad) and accountability (so the big players stop getting away with their lack of transparency).

In a few months we’re planning to put a stop to this. Meaning less money going down the drain (or to the banks) and more money going towards your next pint.

Grab your spot on our waitlist and we’ll get in touch with more details on our 2018 plans!


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