Dynamic Currency Conversion (DCC): a strategic opportunity for acquiring banks and merchants

Benefits of DCC
for merchants

• Increased revenue: by offering DCC, merchants could generate additional revenue through a currency conversion fee. This translates into a new revenue stream without the need to increase prices.
• Improved cardholder experience: tourists, in this case cardholders, often prefer to pay in their local currency to have clarity on the exact amount of the transaction. This reduces uncertainty and improves the perception of the service. The amount that will appear on the cardholder’s statement will be exactly the same as the amount that appears on the receipt given by the merchant at the time of purchase.
• Competitive differentiation: By implementing DCC, merchants can differentiate themselves from the competition by offering an additional service that is highly valued by international customers.

Advantages for
acquiring banks

• Expanded service portfolio: Acquiring banks can expand their service offering by including DCC, allowing them to attract and retain merchants that receive a high volume of international customers.
• Commission generation: similar to merchants, acquiring banks can also benefit financially through currency conversion fees, thus increasing their revenues without additional major investments.
• Strengthening the relationship with merchants: by providing a solution that helps merchants improve their profitability and customer satisfaction, banks take on a more strategic and consultative role, strengthening their relationship with business customers.

Technical and regulatory
considerations

To implement DCC effectively, merchants and acquiring banks must consider several technical and regulatory aspects:

• Technology integration: it is essential that payment terminals are configured so that the application enables DCC acceptance. This requires upgrades to the terminal software and collaboration with payment service providers.
• Regulatory compliance: DCC must be implemented in compliance with local and international regulations, including card brand regulations and consumer protection guidelines. Transparency in the applied exchange rate and fees is critical.
• Training: Both merchant staff and acquiring bank teams must be well trained to offer DCC correctly, explaining its benefits and operation to customers in a clear and accurate manner.

Dynamic Currency Conversion represents a significant opportunity for merchants and acquiring banks throughout Latin America. It not only improves the international customer experience, but also creates new revenue opportunities and strengthens competitiveness in an increasingly globalized marketplace.
Adopting DCC is a strategic step to position acquiring banks and merchants as leaders in innovation and customer service.