Dynamic currency conversion (DCC)

Offering a foreign cardholder the choice of paying in their own home currency rather than the local one, at the point of payment. The conversion happens at the terminal or checkout page instead of at the guest's bank.

A margin is built into the exchange rate the guest is offered, and that margin is shared between the payment provider and the merchant. For a property with a lot of overseas guests, DCC can offset a meaningful share of software or payment costs. Mews, for example, reported that properties with high Multicurrency volume saw a median reduction of 17.4% in SaaS cost, rising to 26.1% where most guests came from abroad.

The catch

The money comes from the guest. The home-currency rate is usually worse for the cardholder than letting their own bank convert, which is why consumer groups object to it and why European regulators have taken an interest in how the choice is presented.

Rules in most markets require that the guest sees the exchange rate and the fee before confirming, and that choosing the local currency is genuinely available. Steering guests toward the home-currency option, whether by script or by interface design, is where properties get into trouble.

Treat DCC as a guest choice that happens to earn revenue, not as a revenue target with a guest attached.