By Lavonne Kuykendall, American Banker
Fifth Third Bank Processing Solutions will begin offering time-of-sale currency conversion services to its retailer clients next quarter, according to Planet Payment.
The subsidiary of Planet Group Inc. of Long Beach, N.Y., will provide the underlying technology to the electronic transaction division of Cincinnati's Fifth Third Bancorp.
Fifth Third merchant clients that receive credit card payments from foreign cardholders will begin offering the cardholder the choice of paying for a U.S. transaction in their home currency, and will offer an exchange rate that Planet Payment said will generally be more favorable than what is typically offered by the customer's credit card provider.
Under the time-of-sale (also known as dynamic) currency conversion system, the merchant and acquirer split the fee cardholders pay when they buy something in a foreign currency. The transaction is then routed through Visa or MasterCard authorization networks in the cardholder's own currency, thus circumventing association and issuer fees that range from 2% to 4% of the purchase.
Fifth Third's retailer clients include Saks Inc., Federated Department Stores Inc., and Circuit City Stores Inc.
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