page_title: Dynamic currency conversion
hierarchical_section_title: Dynamic currency conversion
caption_attribution_description: English: Credit card slip with DCC info
context_page_description: Dynamic currency conversion or cardholder preferred currency is a process whereby the amount of a Visa or MasterCard transaction is converted by a merchant or ATM to the currency of the payment card's country of issue at the point of sale.
  DCC allows the merchant, merchant's bank or ATM operator to charge a markup on the exchange rate used, sometimes by as much as 18%. Where the DCC markup is less than the card issuer's currency conversion fee, DCC can benefit card holders by allowing them to see the amount that their card will be charged expressed in the currency of the card's country of issue. However, in most cases, DCC markups are higher than the card issuer's currency conversion fee, thereby negating this benefit.
  DCC services are generally provided by third party operators in association with the merchant, and not by a card issuer. Card issuers do not provide cardholders with a DCC option at the point of sale, but these two card networks permit DCC operators to offer currency conversion in accordance with their card processing rules.
context_section_description: Dynamic currency conversion (DCC) or cardholder preferred currency (CPC) is a process whereby the amount of a Visa or MasterCard transaction is converted by a merchant or ATM to the currency of the payment card's country of issue at the point of sale.
  DCC allows the merchant, merchant's bank or ATM operator to charge a markup on the exchange rate used, sometimes by as much as 18%. Where the DCC markup is less than the card issuer's currency conversion fee, DCC can benefit card holders by allowing them to see the amount that their card will be charged expressed in the currency of the card's country of issue. However, in most cases, DCC markups are higher than the card issuer's currency conversion fee (which can be zero), thereby negating this benefit.
  DCC services are generally provided by third party operators in association with the merchant, and not by a card issuer. Card issuers do not provide cardholders with a DCC option at the point of sale, but these two card networks permit DCC operators to offer currency conversion in accordance with their card processing rules.
  Without DCC, the currency conversion is carried out by the card issuer when the transaction is charged to the card holder's statement, usually a day or two later, but for an increasing number of cards in real time. Even though the card issuer will publish the exchange rate used for conversion on the statement, most do not disclose the exchange rate used to convert a transaction at the time of payment. Both Visa and MasterCard state that the rates they publish in advance of a transaction posting to a cardholder's statement are indicative, since the rates they use for conversion correspond to the date and time they process the transaction, as opposed to the actual transaction date.
  With DCC, the currency conversion is done by the merchant or their bank at the point of sale. Unlike a credit card company, a DCC operator must disclose the exchange rate used for conversion at the time of the transaction according to credit card company rules which govern how DCC is offered. The DCC exchange rate must be based on a wholesale interbank rate, to which any additional markup is then applied. Visa requires that this markup be disclosed to the cardholder. The credit card company may still charge an additional fee for charges made outside the card holder's home country, even when the transaction has been processed in their home currency with DCC.
  Proponents of this service believe that customers can better understand prices in their home currency, and this makes it easier for business travelers to keep track of their expenses. They also point out that the customer has full transparency inclusive of conversion fees, and can make an informed choice whether or not to use DCC. The financial benefit to the merchant or their card processor may be an incentive for the merchant to offer DCC even when it would be disadvantageous to the customer.
  Opponents of the service believe that customers do not understand DCC, and point out that DCC exchange rate markups are mostly higher than the card issuers' currency conversion fees that DCC avoids, and therefore, in almost all cases, opting for DCC will result in a higher charge to the cardholder.
  Due to the strategic threat posed by DCC on Visa's core revenues, in 2010 Visa attempted to ban DCC - The Australian federal courts found that Visa acted anti-competitively in order to protect its own revenues and was fined $20 million.
caption: Part of a credit card slip, indicating that DCC takes place.
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