What Is a Dynamic Currency Conversion?

Dynamic currency conversion (English: Dynamic currency conversion DCC ) or Cardholder preferred currency CPC (English: Cardholder preferred currency CPC ) is a financial service that assists Visa or Mastercard credit card holders at the point of sale when making foreign payments Convert transaction fees into your national currency. DCC allows customers to see the amount in their local currency that will be charged to their credit card account. DCC services are usually provided jointly by a third-party third party and the merchant, rather than by a credit card organization or card issuer. Credit card organizations do not offer DCC options to cardholders at the point of sale, but instead allow third-party DCC operators to provide currency conversion in accordance with their credit card transaction processing rules.

Dynamic currency conversion (English: Dynamic currency conversion DCC ) or Cardholder preferred currency CPC (English: Cardholder preferred currency CPC ) is a financial service that assists with foreign payments
Dynamic currency conversion was created in 1996 and is commercialized by a number of companies, including Monex Financial Services and FEXCO
Before credit card organizations (Visa and MasterCard) implemented DCC-related rules, when cardholder transactions were converted, there was no need to disclose that the transactions were converted into the customer's local currency. This process was called "back office DCC". Visa and Mastercard now ban this practice and require customer information and consent to DCC. But many travelers report that this rule has not been universally followed.
Reason code 76 for Visa chargeback refusals explicitly states that "cardholders have not been notified that dynamic currency conversion (DCC) will occur" or "cardholders have rejected the local currency of the merchant who chose to pay". Customers have a great opportunity to successfully dispute such transactions, especially when credit card payments are not verified by Visa's Verified by Visa or Mastercard's Securecode. [1]
When a customer wants to make a transaction with a credit card, the payment device detects whether the base currency of the credit card is different from the local currency. On customer-facing payment devices, users are prompted with the option to pay in their home currency. The exchange rate used and the amount expressed in the national currency are displayed on the payment device. Cardholders must choose the currency they want to use for transactions.
If the cardholder chooses to pay in his home currency, the transaction will be converted to the cardholder's home currency at an exchange rate that is added to the service provider's profit. Exchange rates and profit margins must be disclosed to cardholders before they can be recognized as a compliant transaction.
The DCC service provider guarantees that the transaction will request payment from the cardholder's account in the cardholder's currency and pay the merchant in the merchant's local currency. Exchange rate risk is borne by the DCC provider. The card issuer may charge an additional foreign transaction processing fee, which will be shown on the bill.
DCC operates in a similar manner on Internet transactions. When the credit card information is entered to complete the transaction, the system can detect and determine the cardholder's home currency, thereby providing the option of trading in the home currency via DCC.
DCC allows merchants to benefit from Visa or Mastercard settled in foreign currencies, and exchange rate conversion when paying for transactions, so it is welcomed by merchants.
With DCC, credit card acquirers and payment intermediaries can also benefit from exchange rate conversion during the transaction. DCC income has always been important to them because it can pass on the increasing cost of cross-border exchange.
The main DCC service providers are listed below:
  • Alliex Co., Ltd: South Korea
  • ConCardis: Germany
  • Euronet Worldwide: United States
  • First Data: United States
  • FEXCO Merchant Services: Ireland
  • Global Blue: Switzerland
  • Monex Financial Services: Ireland
  • Planet Payment: United States
  • Premier Tax Free, part of Fintrax Group: Ireland
  • Six Payment Services: Switzerland
  • Travelex: Australia
  • Worldline: United States [2]

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