Dynamic Currency Conversion Selection Control Processing
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Solution Overview
Problem
Consumers are frequently subjected to fraudulent Dynamic Currency Conversion (DCC) scams where merchants override the consumer's currency conversion selection, leading to excessive fees, as there is no effective way to ensure that the consumer's chosen currency conversion entity is not fraudulently changed to benefit the merchant.
Innovation Solution
A system and method that ensures the consumer's currency conversion selection cannot be overridden by the merchant by encoding the selection in data, such as a QR code or NFC code, and transmitting it securely through a mobile app, allowing only the consumer's chosen entity to perform the currency conversion, preventing merchant interference.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If merchants are allowed to offer DCC services to convert currencies, then consumers can access local currency conversion services, but merchants can fraudulently override consumer currency conversion selections to benefit themselves
Solution Approach 1:
The system performs preliminary actions by having the consumer select and confirm their currency conversion entity preference before the transaction is finalized. The selection is captured and transmitted to the card issuer in advance, establishing a binding choice that prevents later override by the merchant.
Solution Approach 2:
The card issuer acts as an intermediary between the consumer and the merchant. The issuer receives the consumer's currency conversion selection, validates it, and ensures it is honored during transaction processing, preventing the merchant from unilaterally overriding the consumer's choice.
2Reliability
If real-time consumer verification is implemented to prevent DCC fraud, then consumer protection is improved, but transaction processing time increases
Solution Approach 1:
The consumer's currency conversion selection is captured and transmitted to the card issuer during the initial authorization phase of the transaction. This preliminary action ensures verification is built into the standard transaction flow without requiring separate real-time checks that would delay processing.
3Adaptability or versatility
If DCC services are permitted for foreign transactions, then consumers can access local currency options, but consumers may be charged excessive fees through fraudulent overrides
Solution Approach 1:
The system implements feedback by transmitting the consumer's currency conversion selection back to the merchant terminal through the card issuer. This feedback loop ensures the merchant is notified of the consumer's chosen entity and must honor it, preventing fraudulent overrides that would result in excessive fees.
Solution Approach 2:
The card issuer serves as an intermediary that validates and enforces the consumer's currency conversion selection. By controlling the transaction flow and ensuring the selected entity is used, the issuer prevents merchants from directing consumers to higher-fee conversion services.
Data Source
AI summary
A terminal receives card details for a payment card to process payment for a transaction. The card and transaction details are sent to an intermediate server. The card details are identified as being associated with a card issuer associated with a first currency while the terminal is associated with a second different currency from the first currency. A currency conversion entity selection request is sent to the card issuer. The card issuer requests a consumer select a currency conversion entity for payment at the terminal. A mobile device of the consumer generates encoded data representing: a selected currency conversion entity, the card details, and the transaction details. The encoded data is processed to verify and process payment for the transaction with the selected currency conversion entity preventing any override by a merchant to use a different currency conversion entity at the terminal.