When a credit card payment is made overseas, some merchants let customers choose to pay in Singdollars using Dynamic Currency Conversion (DCC) instead of the local currency.
However using DCC attracts a very high mark-up of up to 18 per cent of the transaction.
The card-issuing bank may also charge another fee whenever DCC is used. The cost will thus be significantly higher than if the transaction had been in the local currency.
I have always opted to pay in the local currency by either informing the cashier, or ticking the credit-card slip if there is an option.
However, there are merchants who use DCC even after they are told not to.
Unfortunately, this becomes apparent only later, after I receive my credit card statements.
I have called the banks issuing the credit cards on the matter. But, the reply is that I cannot file a dispute, as the transaction did happen. The only recourse is to contact the merchant to void and redo the transaction. There is also no option to disable DCC transactions.
Consumers are thus at the mercy of merchants. Merchants know it is highly unlikely for this dispute to be brought to them, considering that the customers are overseas.
I hope agencies like the Association of Banks in Singapore and the Monetary Authority of Singapore will look into this, as it is now becoming a common occurrence.
Credit-card holders must be given a clear choice to reject DCC transactions.
Chan Meng Sun