Dynamic currency conversion is the offer to settle a payment abroad in your own home currency, with the merchant side choosing the exchange rate.
Dynamic currency conversion is the offer to settle a payment abroad in your own home currency, with the merchant side choosing the exchange rate.
Also called: DCC.
How it works#
A terminal, cash machine or booking page asks whether to charge in your home currency or the local one. Choosing home currency accepts a conversion provider’s rate instead of the card network’s; the markup sits inside the rate and appears in no fee schedule. The merchant takes a share of it, which is the entire reason the question is asked.
Not to be confused with#
Dynamic currency conversion is not the same as your own bank’s foreign transaction fee: that fee normally still applies and, with DCC, is calculated on the already inflated amount.
In German#
The German term is Dynamic Currency Conversion. German version of this term
Related terms#
- Foreign transaction fee: A foreign transaction fee is a percentage charge added by the card issuer on purchases that are not in the card’s billing currency.
- Interbank rate: The interbank rate is the exchange rate banks trade at with each other, and it serves as the benchmark against which any markup abroad is measured.
- Cash advance: A cash advance is withdrawing cash on a credit card, which counts as borrowing and therefore carries its own fees and interest rules.
Articles that use this term#
TopicEvery article and term onCards and money.