Dynamic currency conversion explained

You tap your card in a Lisbon café and the machine asks: EUR or USD? Or an ATM in Prague offers to “guarantee” your conversion rate. That’s dynamic currency conversion, or DCC, and the short version is: pick the local currency. The longer version is worth knowing, because the screen is designed to make the wrong choice look like the safe one.

What’s actually happening at that screen

Normally, when you pay abroad, the merchant charges you in its own currency and your card issuer does the conversion, using the card network’s rate plus whatever foreign transaction fee your card charges (some charge none).

With DCC, the merchant’s payment provider or the ATM operator does the conversion before the transaction reaches your bank. You’re shown a total in your home currency, which feels reassuring. But the exchange rate is now the provider’s, and the provider and merchant can share the margin. You’ve swapped your bank’s rate for a rate set by someone who profits from it.

How much it costs

There’s no single number, because each provider sets its own markup, and it can vary by terminal, currency and day. A few reference points:

• A survey by the Norwegian Consumer Council and Sparebanken Vest, cited by the European consumer organisation BEUC, found that choosing DCC cost more in 99.7% of cases, by an average of 7%.
• Wikipedia’s DCC article notes markups as high as 18% (treat that as an upper bound, not a typical figure).

Compare that with a card that charges no foreign transaction fee, or a multi-currency card like Wise Partner, which converts at the mid-market rate plus a fee shown upfront. Our travel money cards comparison goes through the options; the short version is that a good card loses you very little and DCC can undo all of it in one tap.

Worse, some cards still apply their own foreign transaction fee to a DCC payment, because the merchant is abroad even if the currency is yours. Then you pay twice.

What EU rules require

The EU didn’t ban DCC; it made it easier to see. Regulation (EU) 2019/518, which amended the cross-border payments rules, requires that:

• Currency conversion charges on card payments are expressed as a percentage markup over the latest European Central Bank euro reference rate, so different offers can be compared on the same basis.
• That information is clearly displayed at the ATM or point of sale before you commit, along with the fact that you can pay in the local currency instead.
• Your own card provider sends you an electronic message with its conversion charges after a payment or withdrawal in another EU currency.

The disclosure rules applied from 19 April 2020, with the electronic-message requirement following from 19 April 2021. The ECB publishes its reference rates on working days at around 16:00 CET, and you can check them yourself (the ECB says they’re for information only, not a rate anyone has to give you). You can also see today’s mid-market numbers on our currency page.

Outside the EU, disclosure is much patchier. You may be shown a home-currency total with no markup percentage at all. That’s another reason to just say no.

How to refuse it

At an ATM

1. When the screen offers to convert, or asks “Accept this conversion rate?”, choose Decline, Without conversion, or the local currency. The wording varies and the button you want is often the less prominent one.
2. Read every screen. Some ATMs ask twice, and the second prompt is phrased so that “Yes” means DCC.
3. If the machine won’t let you continue without accepting, cancel and use another ATM. A bank-branded ATM is usually less pushy than a standalone machine in a tourist area.

At a card machine

1. If the waiter hands you a terminal showing two currencies, pick the local one.
2. If they ask “Pay in euros or dollars?”, say “euros” (or the local currency) before they key it in. Some staff select it for you as a “favour”.
3. Check the receipt. A DCC receipt usually shows an exchange rate and a home-currency total.

Online and at hotels

Foreign booking sites and hotel checkout can do the same thing: the price “in your currency” is often a conversion done by the merchant’s provider. If you can choose the local currency at checkout, do. Card apps such as Revolut Partner show the merchant’s currency in your transaction list, which is a quick way to spot a conversion you didn’t ask for.

If it happens anyway

It happens to everyone who travels enough: a tired moment, a confusing screen, a waiter who picked for you. Keep the receipt. Card network rules are meant to require that you’re offered the choice between local and home currency, so if you weren’t, contact your card issuer and ask whether it can be disputed. For small amounts it’s rarely worth the time; for a hotel bill, it might be.

The habit that saves you is simple: whenever a screen abroad offers your home currency, the answer is no.