Dynamic Currency Conversion (DCC) Financial service in which holders of credit cards have the cost of a transaction converted to their local currency when making a payment in a foreign currency. This applies to Visa and MasterCard only. For example, the following is a typical DCC transaction at point of sale. A Cardholder (say, from the United States) is travelling in Europe presents Visa/MasterCard for payment in Euros. The credit card details are captured on the point of sale device (POS), which identifies that the card is a USA issued card. The cashier asks the cardholder to pay in US Dollars and the POS converts the Euro amount into US Dollars (based on a margined daily rate). The cardholder signs a receipt that shows the Euro amount, Rate of Exchange and the US Dollar amount. The service guarantees that this exact US Dollar amount will be debited to the cardholder account, and the exact Euro amount will be credited to the merchant’s account. Increasingly, internet sites and mail order companies are also offering this service. In some cases, the cardholder may not even be aware that they are being charged in their home currency, in a process known as "back office DCC". Among the biggest advantages to travellers according to proponents, are the visibility of charges made in foreign countries, the ability to enter expenses more easily (for business travellers), as well as a less expensive fee than the currency conversion rates charged by credit card companies. Opponents argue that often the cardholder is not asked if they wish to pay in their home currency and that cardholders are sometimes unaware of rates and margins used (though this is also the case where the credit card company makes the conversion). Margins added in dynamic currency conversion are usually higher than any currency conversion fee charged by the card issuer (which in some cases are zero). It therefore usually costs card holders less to transact in the local currency (and letting the card issuer do the conversion) rather than in their home currency (using dynamic currency conversion). The main 'losers' from this system are the credit card companies themselves, who no longer reap a profit from currency conversion whenever DCC is used. For example in 2002 Visa and MasterCard reaped $3.6 billion in currency conversion fees (Business Travel News 2003), and DCC providers are increasingly taking a cut of this. External links Official Visa exchange rates Visa FAQ on DCC Search Term: "Dynamic_Currency_Conversion"