Dynamic Currency Conversion, or DCC, is a service in which credit and debit card holders, when making a purchase abroad, have the choice to have the cost of the transaction converted to their home currency at the point of payment. DCC is also offered online when making a purchase in a foreign currency and at ATMs to withdraw foreign currency.
Cardholders can elect to pay in their home currency using DCC with the value of the transaction, including the exchange rate and fees applied visible in real time.
Alternatively, cardholders can also opt to pay in the local currency, however any fees to be applied by the consumer’s own bank remain unknown until a later date.
When DCC is selected, the exchange rate and the conversion fees applied to the transaction replace those that would normally be applied by the consumer’s own bank.
As part of the Cross-Border EU Payments Regulation, from April 2020, payment providers are to fully disclose information on their currency conversion charges prior to the initiation of a transaction denominated in EU currencies only both DCC and non DCC providers are required to present their comparable currency conversion rates as a percentage mark-up over the European Central Bank (ECB) rate
The full cost of the purchase is displayed to you in your home currency so it's a lot easier to determine value for money on your purchase.
Because you are paying for the purchase in your home currency, you can be sure of the amount that will come out of your bank account rather than having to work it out in your head.
DCC allows you to keep track of the amount leaving your bank account in your home currency helping you to keep an eye on your budget and avoid any surprises when you get home.
Peace of mind on the exchange rate
When you're offered to pay in your home currency using DCC, you are guaranteed the exchange rate on the spot. However, when you pay in the local currency, your purchase could be processed by your bank at a later date when the rate is potentially less favourable to you. DCC guarantees the rate you see at the till despite any currency fluctuations.
DCC is a competitor to your bank and card issuer ensuring that they remain competitive on fees and exchange rates charged ultimately benefiting you.
You make the decision
DCC should always be offered as a choice and it is your decision to accept or decline it. The more that you understand about using your card abroad, the better informed your decision will be.