Merchant Credit Card Account Dynamic Currency Conversion

Merchant credit card account Dynamic Currency Conversion (DCC) is an add-on service, which is offered by a retailer at the point of sale (POS) either through a third party agent or through its processing bank. DCC offers consumers the choice of paying for merchandise or services in their own country's billing currency, or to do so in the retailer's pricing currency.

In a standard DCC payment, the sale's price is converted from the merchant credit card account holder's pricing currency into some other currency, which is the "transaction currency." This is the consumer's own billing currency. This conversion is done at the checkout, before a payment processing services bank submits the transaction to the issuer for authorization. The sale's amount is based on the stated price in the retailer's pricing currency and converted at a rate that was agreed upon between the retailer and the cardholder, as well as any other charges assessed for currency conversion.

When facilitated correctly, DCC offers transparency for consumers. It enables a customer to see the sale's amount in both his or her own billing currency and the retailer's pricing currency. That way, the consumer knows precisely how much the merchandise or services cost, and is able to make value judgments in a quick and straightforward fashion.

DCC eliminates surprises, as the amount that is agreed to and validated by the consumer using either a PIN or signature at the checkout, is precisely the amount billed on his or her monthly card statement.

Merchant credit card account users that offer DCC to consumers typically have a high percentage of foreign customers - especially those in the travel and entertainment (T&E) industries, as well as at tourist destinations. DCC can also be made available in card-present and card-absent transactions. For both environments, a DCC payment must feature all of the following:

• Sale's amount of the merchandise or services sold in the retailer's local currency - including a currency symbol next to the amount.
• Currency exchange rate, adding any commission, if available.
• Final price in the payment currency, including the words "Transaction Currency" - as well as the currency symbol next to the amount.
• A disclaimer statement that:
• is clearly visible to the consumer and
• specifies that the consumer has been given a choice of payment in the merchant credit card account user's local currency, and that the customer understands that the currency choice is final.

(Learn more here.)