Dynamic Currency Conversion Explained: Why a Card Terminal Offers It and What It Changes

DCC means the merchant is offering to convert the price at checkout into your card’s billing currency (for example GBP) and charge you in that billing currency, rather than charging you in the local currency.

Mechanically, that choice changes the conversion route: the conversion is performed by the merchant/ATM conversion service as part of the transaction setup, rather than being left to the downstream processing chain.

The prompt appears at that point because the transaction must be submitted for authorisation in a single chosen currency. DCC is therefore presented at the point where the terminal is finalising the transaction details.

That placement can make DCC feel like a routine confirmation screen, even though it is a pricing decision about which conversion route will be used.

Not necessarily. Mastercard states that if the transaction is converted by the merchant or ATM operator, Mastercard currency conversion rates will not apply, and notes that this usually occurs when the cardholder selects to pay in the card’s currency rather than the merchant/ATM currency; see the Mastercard currency exchange rate converter page.

So, selecting DCC commonly means the conversion is handled outside the scheme conversion route, and the “rate you pay” is embedded in the merchant/ATM conversion offer.

DCC is designed to present the local amount and the billing-currency amount alongside a conversion rate or disclosure before confirmation, so that the payer can make an informed selection.

Mastercard’s published DCC guidance describes the nature of the service and the requirement for a cardholder choice; see the Mastercard DCC Performance Guide (Merchant Version).

In practice, receipts matter because they become the durable record of what was agreed at checkout. If the displayed information is not captured on a receipt (or is hard to read), it can be difficult to reconstruct the conversion basis later.

Visa explains that when a merchant offers DCC, the cardholder may be given the option to pay in their home currency, which includes an exchange rate and additional fees; see Visa’s DCC explanation.

That means two identical local-currency purchases can produce different GBP totals depending on whether the conversion was done at checkout (DCC) or later via the processing route. The difference can be driven by the conversion rate offered and any conversion-related fees embedded in that route.

DCC is most visible on card terminals and ATMs, but similar “bill in your currency” offers can appear in online checkout flows. The underlying principle is the same: the merchant is offering to convert the price into the payer’s currency before the transaction is processed.

Where online checkouts present a currency toggle, the total in the billing currency can include conversion margin inside the merchant’s pricing logic, making the conversion route part of the “price you accept” on-screen.

Refunds and reversals are linked to the original purchase record and its currency setup. Where a transaction was billed in the billing currency because DCC was selected, the refund is typically processed against that billed-currency transaction record.

Operationally, this is why DCC receipts become important during reconciliation: if the refund amount appears “off” compared with a remembered local price, the original conversion offer (rate/amounts) helps explain the billed currency values.

DCC is a configured service, so it shows up where merchants or ATM operators have enabled it – often in locations with a high proportion of foreign cardholders.

That prevalence is therefore more about terminal configuration and customer mix than about the underlying goods or services being purchased.

Some providers also frame DCC as a merchant feature with revenue implications, which can influence adoption; see Elavon’s DCC guide for an example of how DCC can be marketed to merchants.

DCC introduces an extra variable: two employees can pay the same local-currency price but accept different conversion routes, producing different GBP totals. That reduces comparability across travel spend and can make variance analysis noisier.

It also shifts the evidence burden towards receipts. In local-currency transactions, conversion happens later and is explained by processing rates and fees; in DCC transactions, the conversion offer is part of the checkout record, so retaining the receipt and its disclosure becomes more important for audit trails.

DCC is a card checkout conversion mechanism at a terminal/ATM (or merchant checkout). International transfers use different rails, different fee components, and different routing and intermediary-bank effects.

If the underlying question is actually about transfer mechanisms rather than terminals, the relevant comparison topics are covered in Tide international transfers: SWIFT vs SEPA vs ACH explained and Tide international transfer fees: provider vs intermediary bank fees, which deal with transfer-chain pricing rather than point-of-sale conversion.