Tourists being “fleeced” when paying by card abroad – Noone

Fine Gael Senator for Dublin Catherine Noone, has today (Thursday) condemned the fleecing of tourists when making card transactions in foreign currencies, via a little-known practice called Dynamic Currency Conversion.

“I condemn this fleecing of tourists when making credit/debit card transactions in foreign currencies. People who pay with their cards abroad are often confronted with two options– they can pay in the local currency, or in their home currency, which the home bank will then calculate using something called dynamic currency conversion. In theory, it sounds convenient, allowing Irish tourists abroad using credit and debit cards to pay in their home currency. However the reality is they have to pay a hefty 3 to 4% often higher, foreign-exchange mark-up for the convenience.

“A restaurant in London could invite an Irish tourist to pay in euros, which they might be inclined to do as it looks more straightforward, yet are none the wiser that the bank has made a reasonable profit and that it would have been cheaper for them to pay in the local currency.

“There is a legislative challenge here. The problem is that the European Commission’s proposed regulation on payment services will legitimise this practice of dynamic currency conversion (DCC), which is deeply problematic in my opinion.

“Naturally, Irish tourists are more comfortable paying in their home currency because it’s familiar.  Cardholders see the local and their native currency prices and, fleetingly, the exchange rate. They don’t however know by paying in the local currency they receive a wholesale exchange rate – generally about 4% better than the dynamic ‘local’ rate which is offered if they pay in their own currency. No consumer would knowingly pay 4% more simply to have a receipt today in his/her home currency and I believe that this is something which should be looked at by the European Commission.

“Banks issuing cards have also long profited from rich cross-border-transaction fees, and I believe it is now time for the European Commission to work on a pro-consumer, pro-tourism move which would end this practice of fleecing tourists”.