Everything You Have to Know About CCY Conversion Fee

The most common usage is that "cross currency conversion fee (CCY)," and "foreign
transaction fee" are interchangeable. However, they're not the identical.

The CCY conversion cost is billed by the processor for credit card payments when you buy or
perform transactions in a foreign nation using your home currency debit or credit card. The
foreign transaction fee on the other hand is charged by the credit card issuer when you
purchase from the foreign market, either on the internet or within the country where the
merchant is located.

We will be more focused on the CCY fee conversion fee and how it operates.

What is a Cross Country Conversion Fee

If you buy something from a foreign merchant's store and pay with your credit or debit card,
the payment is processed in the merchant's home currency. In such instances the CCY cost
of conversion can be imposed by the merchant or your credit card processor.

The currency conversion fee is the fee to convert the currency of your home into the currency
of the seller. This fee is typically 1percent of the amount. CCY fees for conversion are often
called the "foreign exchange fee" or "foreign currency conversion fee".

If you purchase from the foreign market, you may be asked to convert the amount of
purchase in your currency of home. If you accept, the POS at the end of the transaction will
utilize Dynamic Currency Conversion (DCC) to convert the cost of the purchase to your home
currency.

This could sound like an ideal idea, since you'll see the cost of the purchase instantly in the
currency of your choice (rather instead of waiting for the credit card bill) But it's not without a
cost. Along with the DCC not offering a great exchange rate, an additional cost for service is
added. On top of that, you could pay as much as 12% for the cost of transaction.
On the other hand, if you decline DCC and pay your payment through your credit card, the
conversion rate is the rate paid by your card's provider and is usually an acceptable
conversion rate. It could also be concealed in foreign transaction fees on the credit card
statement.

If you choose to not accept DCC and you do, you need to ensure you have a currency
converter app handy so that you know the cost of your purchase in your home currency. You
will not find the price until you have received your credit statement.

It is highly advised to have a currency converter app or at the very minimum be aware of the
current exchange rate. This will enable you to make an easy calculation in your head to know
how much your purchase is in your own currency.

Credit card companies need to clearly state the amount they charge. If a statement indicates
a foreign transfer cost of 3%, 2percent would be the actual foreign transaction fees and 1%
corresponds to the fee for conversion of currency.

DCC can be much more costly than currency conversions that credit card processors offer.

Do I need to cease using DDC?

To avoid extra charges In order to avoid any additional costs, be sure to decline DDC. It is
better to utilize a converter app to convert the cost of your purchase at an international store
to the currency of your home so that you know the cost of your purchase in the currency of
your home. Why do you have to pay for additional DDC charges?

Keep in mind that credit card companies negotiate competitive exchange rates for foreign
currencies, so you can get a decent conversion rate. This is much better than using DDC.
If possible, make your purchase in local currency.

For purchases made in a local currency, either you'll need local currency or you should
locate an ATM at an established bank that offers the best exchange rate. Make sure you do
not make too many visits to an ATM as you get charged each time to use it. To pay for any
purchases you may make, withdraw enough cash once.

How does a cross-currency conversion fee perform?

To comprehend how the CCY conversion fee functions, it is necessary to first comprehend
the fees for foreign transactions. Foreign transaction fees are an amount that is charged for
purchases made with a credit card in a currency that is not the currency used by the card.

It is an extra amount which card or bank companies are able to add to the CCY fees for
conversions that are done abroad. The typical charge is approximately 2% to 3.3% of the
transaction. However, it may vary.

For example, if you withdraw money from purchases in the amount of $1000 using your
credit or debit card, you'll be charged the surcharge of $30. It is assumed that your card
issuer has a 3% foreign transaction fee. If you make ATM transactions, it's the same as for
transactions that need a transaction charge.

Sometimes, CCY conversion fees can be included in the foreign transaction fee. The
combination of the foreign conversion fees with foreign transaction fees may result in a single
foreign payment fee.

There are card providers and credit cards that don't charge foreign transaction fees. Make
sure to contact your bank for information on whether they are able to charge no fee for
foreign transactions.
Common purchases subject to a foreign transaction charge are:

Book international flight tickets

Shopping online on an international website

Utilizing international ATMs

How can I avoid foreign transaction fees

After you have a better understanding of the meaning of international transaction charges,
you may be wondering how you can get rid of them. There are a variety of ways that you can
reduce the need to pay fee for transactions abroad. This includes:

Exchange Local Currency

To avoid foreign or international exchange fees, it's recommended for tourists to change their
currency prior to travel. It is possible to calculate the price of your travel or purchase and
exchange your currency at a local bank. If you're lucky enough, you'll be able to find a bank
or credit union that provides an exchange rate that is fair and you don't have to pay any extra
charges for exchange rates. However, this suggestion may not be appropriate for travelers
who are visiting nations like China where there are advanced mobile payment methods as
well as a predominantly cashless society. It may be more beneficial using a card like AP-1,
that supports QR code payments and directly SGD to RMB conversion (using the funds
available in the virtual AP-1 card) at the point of purchase.

Locate Foreign-Friendly Banks

Foreign-friendly banks are best if you don't wish to pay the foreign transaction fee. It is
worthwhile to ask your bank if they are able to issue a credit card with no foreign transaction
fee. Certain cards don't charge you the fee for foreign transactions.

Do not use ATMs that are located in countries other than your own.

Another way to save money on foreign fees is to pay local currency. This isn't always
possible due to limitations on the amount of money you can carry into the country.
An alternative is to utilize an ATM located in your area at an accredited bank to withdraw
local currency which you are able to use to make transactions locally. As much as you can to
avoid foreign banks and find out if your local bank has a partnership with the bank of a
foreign country. It is more efficient to make big transactions one-to-one rather than a number
of.

Receive a Free Credit Card

A credit card that does not have fees for international transactions is another option to avoid
having to pay large foreign transaction fees. These cards allow you are able to shop
overseas and make transactions without worry that you'll have to pay more.

Another option is using the credit card with an excellent reputation and ensures compliance
with CCY charges. We recommend you utilize an app for currency conversion to determine
how much you paid in your local currency.

What is the cost and Who Pays For Them?

Here are some facts to give you an idea of the fees to be paid and the fees they will incur.

Fee: Foreign Transaction

Charges for international credit card transactions

Issuer: Obsessed

Approximation of rate: 2 percent - 3.3%

Conversion Fee

Conversion of currency from overseas is subject to a surcharge of 10%.

Processor: Imposed

Approximate rate: 1%

Fee : Dynamic Currency Conversion

Imposed on: Point-of-sale conversions to international

Exposed by : Merchant

Rates approximativeof 3 to 12 percent

Be aware when purchasing in the country of your choice. Understanding the various fees and
what they cover can help you have greater control over the expenses of your overseas trip.

CCY conversion charges are a requirement for international purchases. Sometimes, fees for
foreign transactions are removed. But, this is only possible if the processor has waived any
foreign transaction fee. Before you make an international purchase, please check with the
credit card processor.

We would also like to remind you that DCC will only increase the cost of purchasing. If you
decide to not accept DCC and you do, you'll be faced with CCY conversion charges as well
as a foreign transfer fee. These charges can add up to only 3 to 4% to the price of your
purchase.

There's an option that is affordable to make transactions in China as well as payments to

China that is simple and simple to use.

The AP-1 Business: A Cost-Effective, Transparent Alternative

You require a multi-currency credit card, like the AP-1 Business virtual cards, that will make it
simple and cost-effective to make payments into China. Here's what it can do:

AP-1 Business is fast, your payment to your vendor or supplier in China does not require
intermediary banks, which are typical for telegraphic transactions that banks make use of. It
takes only T+1 to have your money directly deposit into the recepient’s UnionPay account.

AP-1 Business costs are comparable with those charged by banks but it provides affordable
exchange rates with UnionPay. There isn't a double conversion from SGD to USD or RMB as
some banks do.

AP-1 Business is easy to set up and can be done all from your phone.

The sole digital account for businesses that can be used to process payments at T+1 is the
AP-1 Business Credit Card. It is quicker than telegraphic transactions issued by banks.
Telegraphic transfers typically involve multiple charges. It is possible to facilitate transactions
until the T+1 limit.

ccy allows you to pay online or offline into China the same way they would a Chinese local
would. It's simple to top up your account with AP-1 or transfer money. The AP-1 card
integrates with UnionPay. It is possible to transfer money to UnionPay personal account
holders UnionPay personal account-holder in China or around the world in just 60 minutes.

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

The website provides more details about the AP-1 Business Virtual Card.
Conclusion

Foreign transaction charges and conversion charges will be applicable to transactions made
in foreign locations. Foreign transaction charges and CCY conversion fees are two distinct
fees. They cannot be interchangeable. However, some cards allow foreign transactions
without charge. The issue should be discussed with your credit card company.

The AP-1 Business virtual card allows you to transfer money to China more quickly than
banks are able to. If you're a professional seeking to pay for transactions to China make sure
you don't delay to get your AP-1 Business virtual card today!