In April 2005, Visa dropped the Multicurrency Conversion (MCC) fees that they were charging for making purchases abroad. They replaced the Multicurrency Conversion fee with an International Service Assessment (ISA) fee. What’s the difference?
The MCC fee was only charged if currency was actually converted. The ISA fee applies when making any kind of transaction abroad. That includes purchases made in U.S. dollars.
Visa likes to be clear that this fee is charged to issuing banks and not the consumers themselves. Visa claims this fee is necessary to support the ongoing maintenance of their global network. To an extent, they’re right. If currency is actually being converted, this 1% fee does reflect actual costs and offers consumers abroad an excellent value when exchanging currency. But the fees don’t stop here.
Issuing banks then have the decision of whether or not to pass this fee along to customers. The reality is that they do. Most also add an additional 2-3%.Why? We’ve yet to hear a good answer. These fees do not reflect the issuing bank’s actual expense. The expense has already been assessed by Visa.
Finally both Visa and MasterCard are susceptible to “dynamic currency conversion” (DCC) fees charged by some international merchants which can add 3% or more to the total purchase. AmericanExpress cards cannot have “dynamic currency fees” added. The usual DCC fee added is between 3-5% but varies from merchant to merchant. Some merchants will not add DCC fees. Visa is quick to point out that these merchant rates are not Visa’s rates. They are not set by Visa and Visa does not have control over them. Merchants claim DCC is actually a service for customers. If so, it’s one the customer pays dearly for.
To determine the fees you’ll be accessed for using a Visa card internationally you will need to add the issuing bank’s fee to the merchant’s fee. Usually, the total fee is between 2-4% but can vary widely from credit card to merchant.
Special Offers from credit cards with LOW foreign transaction fees.
See chart of international conversion fees charged by other major credit card issuers.
Last updated by
TravelFinances.com 
June 19, 2006 
Couple points to share here:
(1) Visa’s International Service Assessment (ISA) fee are Visa’s region specific. E.g., Visa Asia Pacific Region has not yet agreed to implement. Other Visa Regional boards such as Canada, US and EU “may” have agreed to implement it. Also, I didn’t hear Mastercard to introduce ISA fee yet.
(2) Not all Visa & Mastercard regions are allow DCC service. E.g., EMEA and Latin American Countries were not allowed to have DCC service (I am not sure, if this has changed in the last 1 year).
I hope the above would encourage the card users to find out the exact from their card issuers.
I think ISA Fee and DCC service are still quite young in their development and therefore, it will take some time to refine and to prevent any pitfall in the early stage. Card Holders will also need some time to learn about the cost behavior and the benefit. They should find it directly from their card issuer.