While enjoying your Thailand getaway, you may encounter a scam known as Dynamic Currency Conversion (DCC). This tactic is employed to convince tourists to convert their Thai Baht transactions into their home currency at the point of sale or cash withdrawal.

What Is Dynamic Currency Conversion?

DCC is a practice that alters the currency of a transaction to the cardholder's home currency. Let's say you're using an Indian ATM card to withdraw 10,000THB in Bangkok. Ordinarily, this transaction would be reported to your Indian bank as a cash withdrawal of 10,220THB, including the Thai bank's service charge.

Your Indian bank would then convert the transaction to INR at the prevailing rate, add international ATM usage charges, currency markup fees, and GST, and debit your account with approximately INR 23,500. The cost per THB in this transaction would be approximately INR 2.30.

However, if the Thai bank operating the ATM applies DCC, the transaction is reported to your bank as an INR transaction of approximately INR 24,017 using a conversion rate of INR 2.35. Your Indian bank, recognizing this as an international ATM withdrawal, levies an additional ATM withdrawal fee of INR 235 including GST and debits your account with a total of INR 24,252.

The Additional Cost to You

Here's how much more you'll be paying:

• Cost without DCC: INR 23,500
• Cost with DCC: INR 24,252
• Additional Cost: INR 752

(The numbers used here are hypothetical and do not reflect actual rates or fees.)

DCC When Shopping In Thailand

DCC is also used when you make purchases in Thailand using your credit or debit cards. Thai merchants often fail to notify customers that DCC will be applied, leaving them shocked when they receive the transaction slip. I have personally experienced this in Phuket.

How To Avoid DCC at Thai ATMs

When withdrawing cash from an ATM in Thailand, the ATM screen will sometimes display the INR equivalent of the withdrawal transaction. If you see any mention of Indian currency, search for an option to disable DCC. If there's no such option, press the cancel button to cancel the transaction.

In some cases, the screen may offer a DCC override option, but selecting it terminates the transaction entirely. This is a typical tactic employed by unscrupulous banks that coerce customers into DCC. I have seen such ATMs at the arrival area of Suvarnabhumi Airport in Bangkok.

How To Avoid DCC When Shopping In Thailand

When using a credit or debit card for purchases in Thailand, clearly inform the merchant's staff that you want to pay in Thai Baht, not your home currency. When you receive the swipe machine for PIN entry, ensure the screen displays the transaction value in Thai Baht. If you don't see the transaction value, don't enter your PIN.

The risk of DCC and other scams is higher when shopping at small, independent businesses in Thailand. However, it's essential to exercise caution regardless of where you're making transactions.