All you have to know about CCY Conversion cost

The terms "cross currency (CCY)", the conversion fee" and "foreign transaction fees" are
typically interchangeable. However, they are not the identical.

The processor that processes credit card transactions charges a CCY conversion charge
when you purchase products or services in a currency other than the one you are using with
your debit or credit card. The credit card issuer charges the foreign transaction fee when you
make purchases online with foreign merchants.

In this article, we will examine the CCY fee for conversion, the way it works, and a better
alternative.

What exactly is Cross Country Conversion Fee?

If you purchase something from a foreign merchant's store and pay using your credit or debit
card, the payment is processed in the merchant's home currency. The seller, or your
debit/credit card processor, may be charged a CCY conversion fee.

Currency conversion fees are cost of converting your currency to the currency of the seller.
This fee is usually at 1%. CCY conversion fee could also be referred to as "foreign currencies
conversion fee" (or "foreign currency exchange fee").

When making purchases in foreign stores, you may be asked to convert the amount you paid
into your local currency. If you accept to it, the retailer will make use of Dynamic Currency
Conversion to convert the cost of the purchase into the local currency.
While it might appear like an ideal idea, as it allows you to see the cost of the purchase in the
currency of your home immediately (instead of waiting for the credit card invoice) However, it
comes at an expense. Apart from the DCC not providing a satisfactory exchange rate, a
service fee is also added. The cost of transaction can be as high as 12%.

If DCC is declined when you pay with your credit card, the currency exchange rate will be the
rate paid to your card's provider. This rate is generally a good one. This can also be hidden
in the foreign transaction fee on your credit card statement.

If you choose to decline DCC ensure that you use a currency conversion app so that you can
know the price of your purchase in the currency of your home. If you don't have a conversion
application, you won't be able to be able to determine the cost until the credit card statement
arrives.

We strongly recommend that you have an app for currency conversion or at a minimum, be
aware of the current exchange rate. This will assist you in doing the quick calculation that will
let you determine how much your purchase would cost in your country's currency.

The credit card companies are expected to provide a clear indication of the amount that is
paid. For instance, if a statement indicates an international transaction fee of 3percent, then it
would be 2% as the actual foreign transaction fee while 1% could be the fee for currency
conversion.

Typically, DCC is much higher than the conversion of currency provided by the credit card
processor.

Should I Stop DDC?

To avoid additional charges It is recommended to decline DDC. More importantly, you should
utilize a converter app to convert the price of your purchase from a foreign store into your
currency at home, so you can estimate the price in the currency of your home. What is the
reason to pay for additional DDC costs?

Remember that credit card companies negotiate attractive exchange rates for foreign
currencies so you can get a fantastic conversion rate. This is more advantageous over DDC.

If possible, make your purchase in local currency.

To make purchases using local currency you'll need cash or an ATM at an established bank.
There will be a fee for each time you use ATMs if you make too frequent visits to it. To cover
any possible purchases, withdraw enough cash once.

What is the Conversion Fee for Cross Currency Conversion Fee?

To fully comprehend how the CCY converter fee works it is important to first comprehend the
fees for foreign transactions. Foreign transaction fees are charged for purchases made using
credit cards that are in other currencies than the home currency.

It is an extra amount that card companies or banks will add to the CCY fees for conversions
that are done abroad. While the fee for foreign transactions will vary, it's generally charged at
a rate of 2% to 3% of the amount of the transaction.

For instance, when you withdraw funds from purchases worth $1000 using your debit or
credit card, you'll incur an additional $30. The card issuer could charge a 3.3% foreign
transaction fee. You can also make ATM transactions without paying a transaction charge.

The foreign transaction fee could include the CCY conversion fee in certain instances. The
combination of the foreign conversion fee with the foreign transaction fees can result in a
single foreign transaction fee.
Nonetheless, there are some credit and debit card providers with cards that do not charge a
foreign transaction fee. It is important to inquire with your bank whether the provider you
choose has the option of not charging an international transaction fee.

There are a few common purchases that could result in a foreign transaction cost:

Tickets for flights with an international airline

Shop online on an international website

International ATMs

How to reduce foreign transaction charges

After you have a better understanding of what constitutes international transaction charges
You're probably wondering what you can do to reduce them. There are several ways you can
reduce the need to pay fee for transactions abroad. These include:

Local Exchange of currency

It is a good idea to change your currency prior to traveling to avoid foreign or international
exchange costs. If you are able, estimate the estimated cost of your purchase or travel and
prepare ahead of when you can exchange currency at a local bank. If you are lucky enough
to find a credit or bank with a fair exchange and you don't need to pay any cost for exchange
rates, If you're traveling to countries like China but with the most advanced mobile payment
methods and mostly cash-free, this advice would not be applicable. You may be better off
using a card like AP-1, that supports QR code payments and the direct SGD RMB
conversion (using the funds in your virtual AP-1 card) at the point of purchase.

Identify Foreign-Friendly Banks

You can reduce fee for transactions in foreign currencies by searching for foreign-friendly
banks. It is a good idea to inquire at your bank if they are able to choose offering a credit
card that does not charge this fee. Some cards do not charge the fee for foreign transactions.

Beware of Foreign ATM

A second way to save money on foreign fees is to pay in local currency. There may be
restrictions on the currency you can use in the country you are in.

It is also possible to use the ATM at a reputable bank to withdraw local currency which you
can later use locally. Try as much as possible to avoid foreign banks and check whether your
local bank is in been in partnership with a foreign bank. It is much more efficient to conduct
massive transactions in one transaction instead of completing multiple transactions.

Receive a Free Credit Card

You can also save money on international transaction fees by getting a credit card with no
international transaction fees. They allow you to shop globally and conduct international
transactions without worrying whether you'll be charged more.

A legitimate credit card issued by a business that enforces vendors to pay CCY fees can be
used. Also, we suggest you use a currency conversion app to know the amount of your
purchase in your home currency, rather than using DCC.

What are the fees and who will be charged?

These details will give you an idea of the different costs and the individuals who are being
charged.

Cost : Foreign Transaction

Excluded from transactions with credit cards performed overseas

Issuer makes
Estimated rate : 2% to 3%

Conversion Fee

Excluded from: Conversion of Overseas Currency

Processor Impedited

Approximate rate : 1%

Fee : Dynamic Currency Conversion

Imposed on : Point-of-sale for overseas conversion

Merchant imposes

Rates approximativeof 3 to 12 %

Be careful when purchasing in an unfamiliar country. Knowing the different fees and who
they are will give you more control over the costs of your travel abroad.

CCY conversion fees are required for international purchase. You may be able to waive the
fee for foreign transactions in certain circumstances. But that only happens when ccy is
willing to waive the fee for foreign transactions. Before making international purchases, check
with your card's processor.

We recommend that you decline DCC because it can increase the cost of the purchase. If
you decline DCC then you'll likely be required to pay CCY conversion charges and a foreign
transfer fee. These charges can add up to only 3 to 4percent of your purchase price.
It's easy and inexpensive to make payments or perform transactions in China.

AP-1 Business: A Low-cost, Transparent Alternative

You'll need a multi-currency card, like the AP-1 Business virtual cards, to make it simple and
cost-effective for you to pay into China. This is how it works:

The AP-1 business system is speedy. This means that your payment to your Chinese
supplier or vendor does not require intermediary banks, which most banks that offer
telegraphic transfers utilize. It takes just T+1 to have your money directly transfer to the
recipient's UnionPay account.

The AP-1 Business fee is similar to the fees banks charge, however it has direct and
competitive exchange rates with UnionPay (no double conversions between SGD to USD to
RMB like some banks do).

AP-1 Business is simple to set up, you can do it using your mobile.

The sole digital account available specifically designed for business use that can be used to
pay at T+1 is the AP-1 Business card. It's more efficient than telegraphic transfers made by
banks, which are generally subject to fees that are multiple and may facilitate payments up to
T+5.

This allows you to make offline or online payments into China the same way a Chinese local
can. It's easy to top-up and load your account with AP-1 funds and also the AP-1 card works
with UnionPay. In just 60 seconds, you are able to send money to UnionPay personal
account holders in China as well as around the world.

At present, AP-1 only supports USD and SGD. However, other currencies will be added in
the near future.

Visit the website to find out more on AP-1 Business virtual cards.
Conclusion

Foreign transaction charges and conversion fees are applicable to transactions made in
countries that are not in the United States. The CCY conversion and foreign transaction fees
are different charges and cannot be used interchangeably. Certain cards can waive foreign
transaction fee. Make sure to inquire with your provider about this.

The AP-1 Business virtual card allows you to transfer money into China more quickly than
banks are able to. If you are a business that wants to transfer money to China Do not be
hesitant to buy your AP-1 business virtual card today!