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4834- Point-of-Interaction Currency Conversion

Mastercard Reason Code 4834 POI Currency Conversion

Mastercard chargeback reason code 4834: Point-of-Interaction Currency Conversion is one of the numeric labels assigned by banks to each customer dispute, indicating the given reason for the claim. We say the given reason because it may or may not reflect the true reason.

Under certain circumstances, Mastercard may allow consumers to reverse a payment card transaction by filing a chargeback. Chargebacks were designed to be a “last-resort” for disagreements that cannot be resolved with the merchant. However, they’re more often used as a loophole to commit fraud instead.

Reason code 4834 indicates the broad category “Point of Interaction Errors,” generally meaning that something went wrong at the time and place of the transaction. The code can be used in multiple specific situations, many of which had their own individual codes at one time. Point-of-Interaction Currency Conversion chargebacks, for example, were formerly filed under legacy reason code 4846, which should no longer be used.

When necessary, an additional message will be provided along with the reason code to inform the merchant which particular type of chargeback applies to the claim. In claims featuring a 4834 reason code, one of the possible causes is “Point-of-Interaction Currency Conversion.”

What Is a Point-of-Interaction Currency Conversion Chargeback?

A chargeback with reason code 4834 may refer to disputes involving Dynamic Currency Conversion (DCC) at the point of the interaction. For a Point-of-Interaction Currency Conversion dispute to be valid, one of the following conditions must apply:

  • The cardholder claims they were not given the option of choosing the currency in which they wanted the transaction completed.
  • The cardholder claims they did not agree to the currency of the transaction.
  • The cardholder claims the POI currency conversion was performed incorrectly.

To better understand these conditions, merchants need to understand DCC. They must know what it is, how it works, and how it can lead to chargebacks.

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Understanding Dynamic Currency Conversion

Dynamic Currency Conversion (DCC) is a process or service used by international merchants that allows a payment card transaction to be automatically converted to the currency of the card’s issuing country. This conversion happens at the point-of-interaction, whether that is a merchant or an ATM machine.

Merchants, banks, and ATM operators offer DCC as a convenience for travelers, but they are also allowed to mark up whatever exchange rate is used. This markup can be quite high. However, one of the benefits of DCC is that it gives the cardholder a chance to see the total price in currency of the country in which the card was issued. This way, the buyer has a better understanding of the real cost of the goods or services purchased.

If the merchant offers DCC, the terminal will automatically display the transaction amount as the cardholder’s currency. The cardholder can then select which currency they would like to be used for the transaction.

POI Currency Conversion Disputes: Causes and Prevention

According to both Visa and MasterCard regulations, merchants that provide DCC must do both of the following:

  • Disclose the exchange rate and margin to the cardholder.
  • Allow the customer to choose whether or not to use DCC.

Not all merchants comply with this mandate, but they ignore it at their own risk. Failure to either disclose the markup, or to offer the customer a choice, gives the cardholder legitimate cause for a chargeback.

Of course, not all chargebacks are legitimate. As we alluded to earlier, a false claim may mask an attempt at friendly fraud.

A customer can file a Mastercard Reason Code 4834: Point-of-Interaction Currency Conversion chargeback by claiming they were not given a choice to use DCC, or didn’t understand the markup. The merchants may have evidence showing that the cardholder agreed to use DCC in the disputed transaction, though. If that’s the case, the chargeback would be invalid, and merchants should challenge all invalid chargebacks through the representment process.

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The good news is that merchants can prevent most POI currency conversion chargebacks before they happen by implementing the following practices:

  • Don’t default to DCC automatically for transactions.
  • Don’t make DCC mandatory; offer the customer a choice to use it.
  • If using DCC, show customers the total amount in their chosen currency (including the markup).
  • Train staff members on proper use of DCC.

Vigilance, training, and adherence to regulation are the keys to preventing this type of error.

Chargeback Prevention: A Wider View

Merchants can take many steps to help prevent legitimate chargeback claims, but fraudulent chargebacks are another matter. Friendly fraud is post-transactional in nature, meaning there’s no way to identify it beforehand. Merchants can do everything “right,” yet still have a customer dispute filed against them.

It’s generally more efficient to take a proactive stance when it comes to chargeback management. However, a truly effective strategy must involve both prevention and disputing cases of friendly fraud.

Chargebacks911® can help your business manage all aspects of chargeback reason codes, with proprietary technologies and experience-based expertise. Have other questions about Mastercard Reason Code 4834: Point-of-Interaction Currency Conversion chargeback claims, or want to know more about what Chargebacks911 can do for you? Contact us today for a free ROI analysis to learn how much more you could save.


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