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Understanding Dynamic Currency Conversion
Dynamic Currency Conversion (DCC) allows travelers to pay for goods and services in their home currency while abroad, enhancing customer service and understanding of transaction costs. The process involves a point-of-sale device converting the local price to the cardholder's currency at the time of payment, with potential fees from the card issuer. Benefits for merchants include profit from foreign exchange margins and reduced chargeback risks, while cardholders gain clarity in transaction amounts and possible waivers of foreign exchange margins.
Understanding Dynamic Currency Conversion
- 3. Understanding Dynamic Currency Conversion Debunkingthe misunderstanding, hype, misinformation, opinion, and mystery.
- 4. DCC allows creditcard holders to pay for goods and services in their home currency while traveling abroad. What is Dynamic Currency Conversion? Example: An American cardholder traveling in Africa can pay for a hotel in US dollars rather than in the local currency. There are at least 53 different types of currencies throughout Africa.
- 5. DCC: How itWorks – Part #1 1. The cardholder presents a card at the point of sale (POS). 2. The POS device detects that the credit card is foreign. 3. The attendant asks the cardholder if he prefers to pay in his home currency or the local currency. 4. If the cardholder prefers his home currency, the POS device converts the sale price, based on the current exchange rate.
- 6. DCC: How itWorks – Part #2 5. The cardholder signs a receipt that shows: • The sale amount in the local currency • The exchange rate • The final amount charged in his home currency 6. The issuing credit card company may impose additional foreign transactions fees. Every card issuer has different regulations regarding additional foreign transactions fees.
- 7. DCC: Benefits tothe Merchant • Better customer service by allowing payment in home currency • Earn profits, if any, from a portion of the foreign exchange margin typically appropriated by the MasterCard or Visa schemes and the foreign issuing bank • Reduced chargeback risks
- 8. DCC: Benefits tothe Cardholder • Clear understanding at the POS, during the transaction, of the exact amount to be charged in their home currency • Foreign exchange margins normally applied by Visa, MasterCard and issuing banks will often be waived • “Best rate” guarantees
- 9. www.3Gdirectpay.com Jumuia Place, Block#1 Lenana Road Nairobi, Kenya +353 1 8764849 +44 20 35148393 CONTACT US – WE’RE GLAD TO HELP