While shopping in Thailand or withdrawing cash from an ATM in that country, you need to be aware of a scam known as Dynamic Currency Conversion (DCC). Victims of this scam end up paying more than necessary for their shopping or cash withdrawals. This scam happens in other countries too, but usually, the merchant or the ATM should give you an option to disallow DCC. In Thailand, many times, they don’t.
What Is Dynamic Currency Conversion?
DCC is a process in which the currency of a transaction is converted to the cardholder’s home currency at the point of sale or cash withdrawal.
Let us assume that you are using your ATM card issued in India to withdraw 10,000 THB from an ATM in Bangkok. Ideally, this transaction should be reported to your card issuing bank as a cash withdrawal of 10,220 THB (including Thai bank service charge) from an ATM in Thailand.
Your card issuing bank will convert the transaction to INR at the prevailing rate, add international ATM usage fee, currency mark-up fee, and GST, etc., and debit your account with, say, ₹23,500. The cost per THB in this transaction worked out to approximately ₹2.30.
However, when the Thai bank whose ATM you used, applies DCC, the transaction is reported to your bank as an INR transaction of, say, ₹24,017 by applying a conversion rate of ₹2.35. Your card issuing bank is aware that this is an international ATM withdrawal transaction, and therefore adds an ATM withdrawal fee of ₹235 including GST, and debits your account with ₹24, 252.
Additional Cost To You
Here’s how much extra you will pay:
Cost without DCC: ₹23,500
Cost with DCC: ₹24,252
Additional Cost: ₹752
(The numbers used above are imaginary and do not represent actual rates or fees.)
DCC When Shopping In Thailand
DCC is also applied when you shop in Thailand using your credit or debit cards. Thai merchants do not even tell you that DCC will be applied to the transaction, and you get a shock when the transaction slip is printed and handed over to you. I have actually experienced this in Phuket.
How To Avoid DCC at Thai ATMs
When trying to withdraw cash from an ATM in Thailand, sometime during the transaction, the ATM screen will display the INR equivalent of the withdrawal transaction. If you see anything about Indian currency on the ATM screen, look for an option to disallow DCC. If there is no such option, press the cancel button, and terminate the transaction.
It is also possible that the screen gives you an option to disallow DCC, but when you choose that option, the ATM itself will terminate the transaction. This is the typical behavior of a criminally oriented bank that wants to force you to opt for DCC. I have seen such ATMs in the arrival area of Suvarnabhumi Airport in Bangkok.
How To Avoid DCC While Shopping In Thailand
When shopping with a credit or debit card in Thailand, clearly tell the merchant’s staff that you wish to pay in Thai Baht and not in your home currency. When the swipe machine is turned over to you for entering your PIN, make sure that the screen is showing the transaction value in Thai Baht. If you do not see any transaction value, do not enter your PIN.
The risk of DCC and other scams is more when you shop at a small, stand-alone business in Thailand. However, you need to be careful at all times.
- Withdrawing Cash From An ATM In Thailand – All you Have to Know
- Using Credit/Debit Cards While Shopping In Thailand – What You Must Know
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