International trip - Payment options INR vs local currency

[thanix]

All - Posting the below observations from recent international trip by my family.

Shops in Dubai airport and now even larger shops in Europe offer bill in local currency or directly bill in INR. My family was surprised when a super market in a small French town displayed Indian flag and payment in INR.

We all know that these INR transactions abroad will incur Dynamic currency conversion (DCC,) which is mostly 1%+18%GST on the charges. My wife is using Regalia with GVP. So with 2% Mark up charges and 1% cashback, effective rate is same as DCC.

However, there is a difference observed in the exchange rate when opting for INR billing. I will post them in the next post.

 

[thanix]

Dubai Airport:
Payment 1: McDonalds for AED 19. Operator allows to select INR or AED. Card used Regalia Visa. Option selected is local currency AED. Settled at 424.29 INR. Exchange rate on that day is 22.34

Payment 2: Dubai duty free for AED 43. Operator allows to select INR or AED. Card used is same Regalia and same time. Option selected is INR. Exchange rate displayed in screen is 23.07. Settled at 992.xx instead of 962.xx

Now, I checked Visa exchange calculator as it has option to know the exchange rate of previous days. See screenshot. There is bank fee possible and in case of Dubai duty free payment, the extra is 3.15% which I believe is bank fee. Or it is simply the shop is set up for higher exchange rate.

Can someone clarify on how this works? Is this shop specific or bank fee applicable because of INR billing and immediate settlement.

I am excluding the DCC or Mark up as it is charged separately depending on the option which comes in Statement separately. Also transaction in other currencies will be based on settlement date exchange rate and I verified and they match correctly.

 

[Avid_snake]

It is always better to choose to pay in local currency than INR as the exchange rate offered will be basis the POS machine or Bank in Dubai if you choose INR. But when you choose AED, the exchange rate is Visa exchange rate only and beneficial. With INR, you still have to pay 1% DCC + GST and also whatever exchange markup the local bank has. With AED, the additional cost is the 1-3.5% markup on your card.

The POS machine usually shows the exchange rate as you have mentioned in your post which can be used for comparison. Yet to see anyplace where the conversion rate offered was nil or minimal in my international travels.