What is the difference between DCC and multi-currency pricing?

DCC converts a local-currency price at the moment of payment, at the cardholder’s choice, with a markup the cardholder pays. Multi-currency pricing shows and charges prices in the shopper’s currency from the start, with the merchant absorbing the FX cost at settlement. Local acquiring avoids conversion entirely by settling in each market’s currency.

How the two models differ

Dynamic currency conversion lets a cardholder paying abroad be charged in the card’s billing currency instead of the merchant’s local currency, at a rate set by the DCC provider and the acquirer, which includes a markup. It is the only model where the conversion is offered as a choice at the moment of payment, and the only one where the cardholder pays the markup. Multi-currency pricing suits e-commerce: prices are shown and charged in the shopper’s currency from the start, the merchant pays the FX cost at settlement, and there is no offer to decline.

Which one to use

DCC suits card-present tourism, hospitality and ATMs: the merchant stays in one currency, earns a share of the markup, and takes on a compliance program. For merchants who sell abroad every day, multi-currency pricing and local acquiring return more than DCC ever will. The right pricing conversation compares DCC revenue with the savings of local acquiring, not with zero.

More detail in our #PayDecoding episode on dynamic currency conversion.