Luxury Coach & Transportation

February 2014

Magazine for the professional limousine, charter and tour industry.

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Page 51 of 101

48 LIMOUSINE, CHARTER & TOUR FEBRUARY 2014 WWW.LCTMAG.COM FINANCE / CREDIT CARD PROCESSING sion fee paid by the customer ➞ Op- erator gets paid the amount quoted at beginning of sale, but the customer may see a higher charge on the statement than projected 1 from surprise fees. Dynamic Currency Conversion Gives Clients Options DCC solves the problem by allowing op- erators to offer services quoted in USD while offering customers a choice of pay- ing in USD or their local currency. The customer still gets charged a conversion fee, but it's disclosed upfront and re- quires the customer to accept, similar to the way an independent ATM discloses the fee for cash withdrawals. Regardless of whether the client pays in USD or for- eign currency, operators get paid in USD (or the currency of their choice), gener- ally within three days. With DCC, clients can see the f nal amount that will be charged in their own currency, the foreign exchange rate used for conversion, and disclosure of any fees before authorizing payment. This elimi- nates unpleasant surprises, reduces cli- looks like this: Price quoted in operator's currency ➞ Customer pays with foreign credit card in currency quoted ➞ Transaction pro- cessed in operator's currency (foreign exchange rate and processing fees are unknown to customer but will be paid by customer) ➞ Associations convert transaction from customer's currency to operators currency and issue a conver- But it's not as simple as that. Due to foreign exchange rates, fees associated with currency conversion, and fees as- sociated with the processing technology, the customer may end up being charged a higher amount than expected; to use the example above, the Japanese cardholder may see a charge of something like $225, instead of $140, on their statement. This prompts unhappy customers and potential billing inquiries that can bog down your service staff. These types of transactions happen daily worldwide, and the ground transportation industry is beginning to see such situations more of- ten. So how do you remedy the situation? Two Problem-Solving Tools Some credit card processing companies have created platforms to streamline the foreign currency transaction process and meet the needs of operators and clients. There are two options I've seen grow more prevalent: Dynamic Currency Con- version (DCC) and Global e-Pricing (GeP). To recap, the normal foreign trans- action process (without DCC and GeP) 1 Depending on foreign exchange rates at time of transaction processing, the customer may end up paying less in their currency than they projected if the value of their currency rises in relation to USD. L I M O _ 0 2 1 4 i n t l c a r d . i n d d 4 8 LIMO_0214intlcard.indd 48 1 / 2 1 / 1 4 1 0 : 1 8 A M 1/21/14 10:18 AM

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