Monday, August 17, 2009
"We've designed Currency Select as a secure and flexible platform that our clients can count on to provide a marketable margin for each transaction, in most cases comparative to the amount the cardholder is charged by their issuer," Ackermann said. "So, DCC is effectively a transparent transfer of revenue from the issuer to the acquirer."
Following a positive response to the limited introduction of Currency Select in North America in 2008, Travelex is devoting additional product and client service support to North America and launching a comprehensive sales and marketing campaign to penetrate the ATM, POS and e-commerce markets under Ackermann's leadership.
Driving DCC adoption in the United States is not without its challenges. According to Mike Meyyappan, Senior Director, Product Management for TSYS Acquiring Solutions, part of the problem is geographic.
DCC adoption is greater in compact geographic areas like in Europe, parts of Asia and the Middle East, he said. But in the United States the usage is confined to metropolitan cities and tourist destinations, leaving much of the country out of the equation.
On the consumer and merchant level, one of the barriers is education, something that both TSYS and Travelex are addressing in their marketing campaigns. "As we make these offers, the traveler needs to be educated that it is a fair and equitable offer," Ackermann said, adding that DCC has received some negative press that also must be overcome with education. Both Ackermann and Meyyappan stressed the importance of disclosure.
Ackermann said he's seen tremendous acceptance in the last couple of months and Travelex has several deals it expects to come to fruition in the near future that will drive further adoption.
When asked if consumers' initial reluctance may be similar to the first time they were faced with out of network ATM fees Ackermann said, "Maybe. And that's part of the education, too. We're all consumers. If we're surprised by anything, whether it's good for us or not good for us, we're somewhat skeptical of the offer initially."
Ackerman added that brand confidence also plays a part in consumer confidence in DCC. "It's a slow process; however, we feel that with the Travelex brand, with the companies that we're going to be doing business with, that there's going to be that higher degree of trust."
Meyyappan said consumers want to be in the driver's seat. They want to make an informed decision. "And as part of our training we also ask the consumers to look at their specific issuers' policies," he said. "Some issuers, if the transaction was made in the cardholder's home currency do not add any fees whatsoever, while other issuers, regardless of currency, will add fees based on the sole fact that the merchant location is foreign."
Meyyappan gave the example of a German tourist getting charged fees because he's paying for goods or services at a U.S. location, whether it's a DCC transaction or not.
"So consumers have an equal responsibility, if they want to take advantage of DCC, to be informed of their specific issuers' policies," he said. "But we want to live up to our end of the bargain, which is to inform merchants that, 'Hey, you need to disclose this properly, and you need to disclaim this properly so that consumers leave your store with a smile on their faces.'"
Ackermann said the merchant "has to be involved, obviously, because there's a number of ways that we can present the DCC offer to the cardholder whether it's through their POS device or their ATM screen, or if Travelex contracts with the merchant to provide POS devices that have been programmed and ready specifically for DCC.
"The people working the counter must be able to answer the questions that he customer or traveler may have, too."
Ackermann also pointed out that the merchants also share in the margin revenue that the service generates. Meyyappan agreed.
"Merchants also need to be trained and informed on the appropriate use of DCC and for the typical merchant level salesperson, this is not as straightforward as perhaps offering a point of sale terminal or service," Meyyappan said.
According to Ackermann, if a merchant level salesperson whose acquirer offers DCC is calling on a resort or any merchant that has a high volume of international transactions, the prospect for the added revenue from the DCC margin can be compelling. "I mean they're looking for any edge to strengthen the relationship between the ISO and the merchant and this gives them that little bit more," he said.
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