Dynamic Currency Conversion (DCC)

Dynamic Currency Conversion (DCC) is a financial service used in international transactions, offering cardholders the choice to pay in their home currency rather than the local currency of the merchant. Here’s a detailed overview:


DCC allows a customer making a credit or debit card purchase in a foreign country to see the cost of the transaction in their home currency at the point of sale. This service is offered by merchants, often in collaboration with a payment processing company.

How It Works

  1. Point of Sale Identification: When a foreign card is used, the system identifies the card’s country of origin.
  2. Currency Conversion Offer: The cardholder is then offered the choice to pay in the local currency or their home currency.
  3. Exchange Rate Calculation: If the cardholder chooses their home currency, the DCC service calculates the cost using an exchange rate, which typically includes a markup over the standard rate.

Where It Is Used

DCC is commonly found in:

  • Hotels
  • Retail stores
  • Online shopping platforms
  • ATMs

Whether to Use DCC

The decision to use DCC depends on various factors:

  • Exchange Rate: The DCC exchange rate often includes a higher markup than what your bank would charge.
  • Understanding Costs: Some prefer DCC for the clarity of knowing exactly how much will be charged in their home currency.


DCC charges are calculated by converting the purchase price using an exchange rate set by the merchant’s bank, which includes a margin. This rate is often less favorable compared to the rate your bank would offer.

Pros and Cons


  1. Immediate Currency Conversion: Know the exact amount in your home currency instantly.
  2. Convenience: Simplifies understanding costs without needing to calculate conversions.


  1. Higher Costs: Exchange rates in DCC are usually less favorable.
  2. Additional Fees: Some banks charge extra fees for DCC transactions.
  3. Lack of Transparency: The markup on the exchange rate may not be clearly communicated.

Examples of DCC

  1. Tourist Shopping: A tourist from the USA shopping in France is offered to pay in USD at a boutique. The amount in USD is higher than the standard exchange rate would suggest due to DCC.
  2. Hotel Booking: A traveler from Japan books a hotel in Italy and chooses to pay in JPY at the checkout. The final charge includes a DCC markup.


Whether or not to use DCC depends on personal preferences and awareness of the potential extra costs involved. It offers convenience and immediate clarity in your home currency, but often at the expense of a higher exchange rate.

This page was last updated on December 14, 2023.

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