Dynamic Currency Conversion, DCC - biggest enemy of any Monzonaut! Confusing screens , double negative questions , sometimes even three screen prompts to select DCC can really make it difficult for good Monzonaut to steer clear from DCC.
I haven’t seen an example where ATM or POS with DCC offered better rate than Monzo (fees included). Even with planned ATM withdrawal fees, rule of thumb - Monzo is better and will be better because Monzo doesn’t charge any mark up on exchange rates. However, if you had seen an example where DCC would be cheaper than Monzo or did the math - comment here!
Dynamic Currency Conversion is nothing more than the merchant or ATM provider and their card processors like Elavon trying to generate extra profits by providing “service” that MasterCard&Monzo would do for free.
In some rare scenarios, ATM might only offer their own exchange rate. If you don’t like it, you’ll need to find another ATM or accept your fate (and bad exchange rate).
You can read about DCC in a nice article here:
And like fighting DCC wasn’t enough, you might get some dishonest merchants pushing DCC less legally, explained in this article:
In above article, Mastercard said clearly that merchants need to get consent for DCC and they can’t override customer’s decision once PIN is entered:
"Obviously, this is not the right procedure and is not compliant with the applicable legislation and Mastercard rules… The cardholder’s PIN provides confirmation and approval of the transaction that is about to take place and should therefore always be the last step in the transaction."
The document later adds: “Automatic DCC is when a merchant conducts DCC and submits authorization or pre-authorization without informing or seeking cardholder consent. Automatic DCC is strictly forbidden under the applicable legislation and Mastercard rules. A merchant or terminal should always provide a choice to the cardholder.”
How to check if your purchase went through with DCC?
It’s quite simple if you have internet connection, open Monzo app and check this transaction:
- If transaction appears in GBP instead of local currency, you got DCC exchange rate
- If transaction appears in local currency, you’ve got Monzo rate!
If you don’t have internet connection, you can find it on receipt from ATM or POS.
Below examples of ATM and POS screens from google images.
They might claim that there are no fees and 0% markup/commission, but it’s never true:
This one says 0%, but commission is hidden in ‘monex wholesale rate’.
And this one is total rip off at 10% margin, but £0 commission…
Sometimes there are no fees, just exchange rate is bad:
Double accept ATM
And some ATM screens are fairly okay, jetlagged traveller after 10h flight can deal with it :
Sometimes screen shows different option - ‘Debit in X currency’, always select ‘Debit in LOCAL CURRENCY’. If you select GBP, DCC will be applied:
Merchant can ask what currency you’d like to pay in - always ask to be billed in local currency. If you are given a terminal and you’re not sure what button to press to skip DCC, ask merchant.
And beware, all receipts are printed with remarks that you accepted DCC, so if you didn’t accept it - contest it immediately.
That being said, getting into arguments with local merchants might be unpleasant experience, so if you lost a little bit of money because of DCC, it might not be worth the hassle and lost nerves/time to get it sorted, when you could stay in the holiday spirit instead.