Back to BlogDynamic Currency Conversion (DCC) – What Is It & What's in It for Merchants and Consumers?
Dynamic Currency Conversion (DCC) allows customers to pay for goods and services abroad in their local currency. While some view it as a convenient option, others see it as an added expense with unclear fees.
In this blog, we explore the value of DCC for both merchants and consumers, addressing common concerns and explaining how DCC can enhance customer satisfaction and boost revenue.
What Is DCC and How Does It Work?
DCC is a payment service that gives international customers the option to pay in their home currency when using a foreign credit card. Here’s how it works:
- Automatic Detection: When a foreign card is used at a DCC-enabled terminal (in-store or online), the system automatically recognizes it.
- Currency Choice: The terminal offers the customer a choice to pay either in the local currency or in their home currency.
- Transparent Pricing: The current exchange rate and the total cost in the customer’s currency are clearly displayed, ensuring transparency.
This convenience often leads to higher customer satisfaction, as customers feel more comfortable knowing exactly what they’re paying in their own currency.
Key Benefits of DCC for Merchants
Enhanced Customer Satisfaction
Offering DCC improves customer satisfaction by providing clarity on costs. When customers know what they’re paying in their home currency, it reduces confusion and complaints. Additionally, payment processors handle any disputes, ensuring a smoother resolution process.
Competitive Exchange Rates
DCC terminals update currency conversion rates daily, ensuring merchants and customers benefit from competitive exchange rates. This helps maintain trust and satisfaction.
Additional Revenue Streams
Merchants can earn commissions from each DCC transaction. Over time, these small earnings can add up, contributing to increased profitability.
Lower Transaction Fees
Since the terminal handles the currency conversion instead of the bank, merchants often benefit from reduced transaction fees.
Key Benefits for Consumers
Transparent Costs
With DCC, consumers know the exact amount they’re paying upfront. Shift4’s two-party model ensures that consumers get the best possible rate at the time of purchase, without any hidden fees.
Immediate Cost Visibility
For corporate travelers, seeing the cost in their home currency right away helps with expense tracking and budget management.
No Additional Costs
Customers see the total cost and exchange rate upfront, ensuring there are no surprises when their credit card statement arrives.
Addressing Criticism: Is DCC Costlier for Consumers?
While DCC may not always be the cheapest option, it offers value in other ways. The service provides transparency, updated conversion rates, and no hidden charges. Plus, consumers have the freedom to choose between paying in their home currency or the local currency, depending on their preference.
For example, opting for DCC might help consumers avoid fluctuating exchange rates or foreign transaction fees imposed by their banks. Ultimately, DCC empowers customers to choose the option that best suits their needs, whether that’s cost certainty or the potential for savings.
Best Practices for Implementing DCC
Merchants don’t need to know a customer’s origin in advance to offer DCC. DCC-enabled payment terminals automatically recognize foreign cards and provide the option to pay in the customer’s native currency.
However, training staff to explain DCC benefits clearly can significantly increase its adoption. Well-informed staff can help customers understand the advantages, leading to higher uptake and more revenue for merchants with minimal effort.
How Can DCC Boost Customer Service, Revenue, and Transparency?
DCC empowers merchants to offer international customers a choice in how they pay, along with complete price transparency. Customers know exactly what they’ll pay at checkout, with no hidden fees.
For merchants, each DCC transaction can translate into additional revenue, as commissions accumulate over time. This not only boosts profitability but also enhances the overall customer experience.
Can DCC Help Reduce Chargebacks and Disputes?
Yes, DCC can reduce chargebacks and disputes because it eliminates hidden charges. Customers see the total amount upfront and choose to accept DCC, reducing the likelihood of misunderstandings and disputes later on.
Explore How Shift4 Can Help
Dynamic Currency Conversion (DCC) offers customers transparency, flexibility, and convenience while empowering merchants to boost customer satisfaction and drive revenue. When implemented effectively DCC becomes a win-win solution for both businesses and their customers.
If you're ready to explore how Shift4 can enhance your payment experience with DCC, contact us today.