Many tourists opt to use their home currency to pay for goods and services while travelling abroad, when available. Although convenient, this service comes at a cost, says advice in an op/ed in CNN Travel.
The feature, known as “dynamic currency conversion,” converts a traveller’s bill into their home currency, so they have a better idea of how much they are spending. However, the fees can be exorbitant, with one study showing the average fee for this conversion is as high as 7.6 per cent. While expensive for tourists, the currency choice service can be lucrative for those who use it, and retailers and conversion providers often share the revenues. So far, government regulators have been hesitant to intervene, with the exception of the European Union, which announced regulations aimed at protecting consumers and enhancing transparency.
The authors, assistant professors at Utrecht University, suggest simplifying the information provided to customers and implementing maximum conversion charges to protect them from excessive fees.
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