Back to BlogDynamic Currency Conversion: Unlocking Hidden Revenue for Merchants
As cross-border shopping and international travel continue to grow, providing a seamless payment experience for customers has become a critical factor for merchants. One powerful way to enhance this experience is through Dynamic Currency Conversion (DCC), a solution that not only offers convenience for shoppers but also opens up a new revenue stream for merchants.
In our recent article on DCC, we explored its potential for allowing customers to pay in their local currency when shopping abroad—a convenience for some, yet perceived by others as an added expense.
Following up on that earlier article, we’ll now take a deeper dive into how DCC can directly impact merchant revenue. By unpacking DCC’s financial benefits, we’ll show how this tool not only enhances customer satisfaction but also opens new revenue streams for businesses.
What Is Dynamic Currency Conversion (DCC)?
Dynamic Currency Conversion allows international customers to pay in their local currency at the point of sale or online checkout. When a customer opts for DCC, the amount is converted at the current exchange rate, and they see the total in a currency they’re comfortable with, providing transparency and ease.
- For customers, DCC means they know exactly what they’re paying, avoiding potential confusion around exchange rates or unexpected fees from their banks.
- For merchants, DCC opens up a valuable opportunity to earn additional revenue with every transaction.
Financial Benefits of DCC for Merchants
1. Increased Revenue Potential
With DCC, merchants earn a share of the currency conversion fee each time a customer chooses to pay in their local currency. This additional revenue is generated passively, without requiring any adjustments to existing pricing or operational costs.
2. Enhanced Customer Experience
Providing a familiar currency option can increase customer satisfaction, helping to boost conversion rates and encourage repeat business. This is especially valuable in sectors with high international traffic, such as hospitality, retail, and travel, where convenience can play a key role in purchase decisions.
How DCC Offers Transparency and Potential Savings
When a consumer makes a card transaction in a foreign country without using Dynamic Currency Conversion (DCC), their card issuer typically applies foreign exchange (FX) charges. This means they’ll incur additional costs regardless of the payment method they choose.
However, DCC provides consumers with complete transparency, allowing them to see the price in both the local currency and their home currency upfront. This empowers them to make an informed decision about how to pay.
In many cases, DCC can result in financial savings, depending on the exchange rates and fees charged by the card issuer, which can vary significantly. By offering DCC, merchants give customers the option to avoid hidden fees and potentially save money, all while providing a clearer, more straightforward payment experience.
How Dynamic Currency Conversion (DCC) Works for Shift4 Merchants
DCC feature allows merchants to offer international customers the choice to pay in their home currency, making checkout smoother and more transparent. Here’s how it works:
- Initiate Payment: The merchant starts the payment as usual, and the shopper presents their card to the Shift4-enabled terminal.
- Currency Detection: The terminal automatically identifies the shopper's billing currency based on their card's country of origin.
- Choice of Currency: If the shopper’s billing currency is different from the local currency, the terminal prompts them to choose:
- Local Currency – The transaction proceeds in the merchant’s currency.
- Billing Currency – Foreign-exchange conversion is applied, allowing the shopper to pay in their own currency.
- DCC Receipt: If DCC is selected, the Shift4-generated receipt includes details of the currency conversion, ensuring transparency.
- Contactless Transactions: For contactless DCC payments, the shopper needs to enter their PIN for online verification to complete the transaction.
This simple process empowers merchants to provide a better experience for global customers by offering flexibility and clarity in currency options.
Real-World Example: DCC in Action
At a popular beachfront hotel bustling with international tourists, the management decided to roll out Shift4's Dynamic Currency Conversion to better serve its growing number of overseas guests.
One evening, a guest from the UK checks in and swipes their card at the front desk. The hotel’s POS terminal instantly detects that the guest’s billing currency is GBP, while the local currency is EUR. The terminal prompts the guest to choose between paying in Euros or British Pounds. Opting for GBP, the guest is relieved to pay in their home currency and avoid any surprise foreign exchange fees from their bank.
This simple choice not only makes the payment process more transparent and convenient for the guest, but it also boosts the hotel’s revenue through the foreign exchange conversion fee.
What’s more, this seamless experience leaves guests feeling satisfied and appreciated, encouraging positive reviews and repeat visits from international travelers. For the hotel, it’s a win-win: happier customers and an added income stream—all thanks to DCC.
Conclusion: Boost Revenue and Improve Customer Satisfaction with DCC
Dynamic Currency Conversion has the potential to transform international sales, providing benefits for both customers and merchants. For customers, it’s about convenience, clarity and choice. For merchants, it’s an opportunity to tap into hidden revenue and enhance customer satisfaction.
As global shopping continues to rise, offering a smooth, localized payment experience has never been more important. By implementing DCC, merchants can better meet the needs of their international customers while driving incremental revenue growth.
Ready to explore the benefits of DCC? Connect with our team to find out how you can integrate DCC into your payment process and start unlocking new revenue today.