What is dynamic currency conversion (DCC)?

Dynamic currency conversion, or DCC, is a point-of-sale payment option that allows cardholders from abroad the option of paying in the local currency or their own currency. DCC typically incurs a fee, which may be variable and pegged to the currency in question.

What are the benefits of dynamic currency conversion?

Merchants can generate revenue from conversion fees on DCC transactions, and your exchange rate will be locked in at the time of sale. Some customers actually prefer shopping at merchants offering DCC. However, this is a matter of personal preference.

How is DCC calculated?

DCC converts the purchase price from local currency to the customerâs home currency, based on a predetermined exchange rate. A special terminal at the point of sale shows both prices, including other added costs.

Do customers like DCC?

Some cardholders appreciate that DCC is convenient and puts purchases in a currency they already understand. However, others prefer not to use it, as it can involve exorbitant fees, depending on the exchange rate.

Does DCC cause chargebacks?

DDC does not cause legitimate chargebacks as long as all card network regulations are followed. However, it can increase the risk of friendly fraud disputes due to cardholders receiving higher charges than expected. It can also lead to disputes if merchants do not pay close attention to best practices.

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Dynamic Currency Conversion (DCC)

If you do business internationally, offering Dynamic Currency Conversion (DCC) can be convenient for your customers. Is it good for you? In this post, we look at what DCC is, how it can increase revenue, and why merchants who offer it may be upping their risk for chargebacks.

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