Many credit card companies (my knowledge is mostly of NZ and Australian credit card companies) when they do overseas transactions usually convert it through US dollars. [...] I use paypay whenever possible.
Me too. It converts the amount into my currency on the spot, so I can see before confirming the transaction if the conversion rate is okay and decide whether to proceed with the transaction. And I find their exchange rate pretty decent. Often much better than what my local bank would charge if I paid with a credit card. Our banks use the same process you described... First they convert the foreign currency into US dollars. Only, then they convert that into euros, and the last step is the conversion into Croatian kuna. This process often bumps up the price due to different exchange rates. So I stick with PayPal.