Thailand ATM Dynamic Currency Conversion Scam

Thai ATM Dispensing THB
Thai ATM Dispensing THB

Tourists hate getting scammed. I used to think that paying a fee of 200 THB each time for making an ATM withdrawal in Thailand was a scam. Of course, this fee was over and above the currency conversion charge and ATM withdrawal fee charged by my own bank. If I withdrew 10,000 THB from an ATM in Thailand, I paid 200 THB fee to the Thai Bank. The Thai bank would not report this extra 200 THB charge as a fee but as a withdrawal. So, to my bank in India, my ATM withdrawal was reported as 10,200 THB. My bank then charged its own “international ATM withdrawal fee”, that was like 2.50 USD or something, roughly equal to 85 THB. On top of that there was a currency conversion charge of 3.50%, so another 357 THB. To sum it up, out of the 10,000 THB I withdrew, I actually got 9358 THB (10,000 – 642) in my hand. In percentage terms, 642 of 9358 is 6.46%. And this was the fee component alone. The actual amount of money that got debited to my account in India would be calculated in terms of a so-called “retail exchange rate” that was my bank’s way of saying, “Yes, I am robbing you and you can’t do anything about it”. As if that was not enough, I recently learned of a new ATM scam going on in Thailand and its called “Dynamic Currency Conversion”.

Dynamic Currency Conversion (DCC)

I got my first glimpse of DCC when I was buying a shirt in ‘Jungceylon Mall’ in Patong (Phuket). The price of the shirt was 450 THB but the charge slip that came out of the swipe machine showed a charge of INR 910. That meant an exchange rate of roughly 2.02 INR for every THB. The prevalent THB-INR exchange rate at that time was near about 1.90 and if my credit card had been charged in THB while buying that shirt, I would have paid to my bank in Indian Rupees at the exchange rate of 1.965 (1.90 + 3.50% cross-currency charge). Instead of paying INR 910, I would have paid INR 884. Clearly, the DCC scam robbed me of INR 26 on just that one transaction of 450 THB. Now imagine how much you can lose to this DCC scam if you are withdrawing 20,000 THB or more from an ATM in Thailand?

Thailand ATM DCC Scam

Most Thai ATMs allow a maximum withdrawal of 20,000 THB in a single transaction but there are some banks that allow 25,000 or even 30,000 THB at one go. This used to be helpful when there was no DCC because the ATM withdrawal fee remained fixed at 200 THB regardless of the amount withdrawn. So, withdrawing a higher amount in one transaction resulted in a saving of Thai ATM fee in percentage terms. But then, Thai banks became smarter. They discovered DCC.

My Experience

During one of my visits to Thailand, I withdrew some cash from an ATM at the Bangkok Suvarnabhumi airport. Before the transaction for authorised, the ATM screen showed me a conversion rate and the total amount in Indian Rupees and asked me to confirm it the rate was acceptable or not. I was supposed to press “Yes” or “No”. I pressed “Yes” and got the money. Later, in Pattaya I asked an Indian restaurant owner about this. He told me that the conversion rate offered by the ATMs of some banks is better than the others. He could not name the best bank but said the bank with “Red Color ATMs” offers a better conversion rate. Now my questions is, do all ATMs in Thailand force DCC upon international customers or is it a matter of choice. What happens if I press “No” when the ATM asks if the conversion rate is acceptable to me or not? Does the transaction gets cancelled or the ATM goes ahead and bills me in THB without using DCC? I would like to try that and see.

Try Different Thai ATMs

The best way to find out the truth will be to try ATMs of different banks in Thailand. First, note down the conversion rate showed on the ATM screen of one bank and choose “No”. If the transaction continues and the withdrawal is successful, it should mean that the ATM has allowed the withdrawal without forcing a DCC. In the second scenario, once we say “No” to the conversion rate displayed on the screen, the transaction will get terminated. In that case, we can try an ATM of another bank and compare the displayed conversion rate with the rate shown by the earlier ATM.

Worldwide Scam?

I searched on Google and read it somewhere that ATM DCC is a worldwide scam. Most banks add anything between 5 and 10% on the inter-bank exchange rate to offer a DCC to the person making the withdrawal. In such a case, the ATM transaction gets billed as an all-inclusive purchase transaction denominated in the home currency of the cardholder but he or she ends up paying a much higher currency conversion rate which usually should be 3.50% or less.

Some online articles suggest that one should always say “No” to DCC. But I am not sure if an ATM in Thailand will allow me to make a withdrawal without DCC. And what about the bank specific DCC exchange rates? I would really like to know which bank or banks in Thailand offer the best exchange rates under DCC, if that is getting forced on me.

ATMs in Thailand Are Generally Complicated

ATMs in Thailand are difficult to use. The initial 200 THB fee, then the DCC, and later the added risk of getting your ATM or Debit Card cancelled. Yes, ICICI Bank once cancelled my ATM card just because I had used it at an ATM in Indra Market in Bangkok. The bank said that the Indra Market was a high-risk location.

The Best Option?

Taking USD currency notes to Thailand is the best way of carrying money with you. Do not try to buy THB in your home country. That will prove to be very expensive. USD bills of 50 and 100 get the best exchange value in Thailand. Know about the best places to exchange money in Thailand as I have found them in Bangkok, Pattaya, Phuket, and Chiang Mai.

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