Payment Processing · Industry
A visitor from Boston pays for dinner in Lisbon and the card machine asks: pay €100, or pay in dollars? That second option is dynamic currency conversion, or DCC. If the customer picks dollars, the conversion is done at the terminal, at a rate chosen by the merchant's payment provider, instead of later by the customer's own bank. The customer pays a markup for the privilege, and the merchant usually gets a share of it.
This guide is for a hotel, restaurant, shop or online store in the US, UK or EU deciding whether to offer DCC, or finding that its terminal already does. It covers who earns what, the network rules and the law as of October 2026, and the published terms of providers the site has reviewed.
Without DCC, the cardholder's bank converts the charge at its own rate, plus any foreign transaction fee its card carries. With DCC, your acquirer or a DCC operator working for it converts on the spot, sets the rate, adds a markup and shows both on the screen. You are settled the original amount in your own currency.
The markup is the revenue, and it is split. Mastercard's DCC guide for merchants describes the markup as "a commercial agreement between an acquirer and a merchant/ATM owner", and none of the providers below publishes the split. Barclaycard's DCC terms, dated April 2015 and still linked from its DCC page, name the Irish firm Fexco as its operator and define the rate as an index rate plus a "loading percentage" and the merchant's share as a monthly "FX commission", with both set in the merchant application form or otherwise agreed, rather than in any published tariff. Lloyds Bank Cardnet says you "receive a percentage of each converted DCC currency transaction", and Elavon, Clover in the UK, Windcave and Worldline all advertise a rebate or payback, all without a figure.
The only published merchant share we found is outside the three markets here: Moneris's Canadian DCC schedule, still headed December 2016 and republished unchanged on this point in its 2026 terms, sets a "Merchant Revenue Share", payable "if any", of 1% of the purchase amount. Viva.com instead says a DCC payment carries zero processing cost for the merchant, and gives the example of a €100 sale on a UK card whose fee "may reach €2.5". It adds that merchants can also choose to earn revenue from DCC, without saying how much. Nexi Germany's price list, dated 1 May 2026, charges €3.95 a month per terminal to switch DCC on.
Most measured evidence predates the 2020 disclosure law. In 2017 the European consumer organisation BEUC summarised two studies. Stiftung Warentest's 2016 testers in 13 non-euro countries found that DCC added between 2.6% and 12% to the price wherever it was used, and between 2% and 5% on payments in shops. A Norwegian bank's 2016 study of 1,500 transactions by its customers abroad found that cash withdrawals converted into kroner cost on average 7.6% more, and up to 12.4%, and were cheaper in only 4 of the 1,500 cases. Stiftung Warentest repeated the exercise in 2019 in 23 non-euro countries and found cash machines pushing conversion in 15 of them; accepting would mostly have cost more than 5%, and up to 13.7%.
We found no official measurement published since. The European Commission's review of the cross-border payments regulation was due in 2022 and was postponed. The research centre CEPS says its study for the Commission ran from October 2025 to August 2026, and the project page linked no report when we checked on 6 October 2026. Issuers agree: Chase's guide tells cardholders that if they choose dollars, "the merchant decides the exchange rate, which could be inflated".
On 6 October 2026 the European Central Bank's reference rate was $1.1269 to the euro. Take a €100 restaurant bill in the euro area and an American customer:
The network rules apply everywhere, including the US. Visa's Core Rules and Product and Service Rules (18 April 2026 edition, section 5.8.9) and Mastercard's Transaction Processing Rules (9 June 2026, section 3.8) require that:
Online, the rules diverge. Mastercard allows a currency option to be pre-selected at an online checkout if the customer is told and can decline it; Visa's rule against pre-selection makes no such exception. Visa also says an online store that uses the card number to work out whether to convert must follow every DCC rule. Mastercard's guide also rules out receipt wording such as "this choice is final". Both networks audit. Visa can assess the acquirer up to $10,000 or $50,000 depending on the violation, and Mastercard's guide lists assessments of up to $20,000 per violation when a merchant fails a test by the mystery shoppers it uses to check terminals, and up to $25,000 for registration or data failures.
In the EU, Article 4 of Regulation (EU) 2021/1230 carries forward rules first made by Regulation (EU) 2019/518. Anyone offering currency conversion at the point of sale must express its total charges "as a percentage mark-up over the latest available euro foreign exchange reference rates" published by the European Central Bank, and show that figure before the payment. It must also show the amount in both currencies and tell the payer they can pay in the merchant's currency instead. Those duties have applied since 19 April 2020. From 19 April 2021 the cardholder's own bank must also send an electronic message showing its markup when the card is used in another EU currency. The rules cover payments in euro or another EU currency that involve a conversion.
In the UK, the 2020 rules survive as assimilated law (what was called retained EU law until 2024). Article 3a of Regulation 924/2009, as it stands on legislation.gov.uk on 6 October 2026, still requires a markup over the ECB's euro reference rates and disclosure at the point of sale. The bank-message duty never became UK law, because it started after the transition period ended. The Financial Services and Markets Act 2023 provides for the regulation to be revoked, but legislation.gov.uk, up to date to 6 October 2026, shows that revocation as not yet in force. The Payment Services Regulations 2017, regulation 57(2), separately require whoever offers conversion to disclose all charges and the rate.
None of this binds a US merchant on US sales; a US hotel answers to the network rules.
Visa's dispute condition 12.3, Incorrect Currency, covers a DCC sale where the cardholder "did not expressly agree to DCC" or was refused the choice of paying in local currency. The dispute is for the full amount. If the acquirer cannot prove agreement, it can re-present the sale only in your local currency, minus the DCC fees and commission. Mastercard handles DCC disputes in its Point-of-Interaction Error chargeback category. So at best you keep the original sale in your own currency and lose any share of the markup, and you may still pay whatever your provider charges per chargeback, which our comparison of chargeback fees sets out.
Currency adds risk. Barclaycard's DCC terms convert a chargeback at the rate on the day it is processed and leave you "liable to us for the full amount". Moneris warns that a DCC chargeback can debit more than you were originally paid. Dojo notes that if the exchange rate moves between sale and refund, the cardholder has a chargeback right for any shortfall.
Elavon, Worldline, Windcave, Nexi and Clover in the UK also offer it. Square does not: its developer documentation says payments are processed in the seller's currency "with an exchange rate set by the card-issuing bank".
A foreign card already costs you more to accept, whether or not you offer DCC. In the US the network cross-border assessments alone add about 1.45 points on a dollar-settled Visa or Mastercard sale, as our guide to foreign card fees for US merchants sets out. UK flat-rate providers price non-UK cards higher too, as our UK card machine fee comparison shows. DCC is often sold as a way to recover that, but your share is a fraction of a markup the customer sees on the screen. That guide also notes that the networks charge a higher assessment when a sale is not settled in dollars, and a DCC sale is processed in the cardholder's currency. Ask your provider whether that higher rate applies, and who pays it.
