Dynamic currency conversion: why you should always pay in the local currency

What is dynamic currency conversion?

Dynamic currency conversion (DCC) is when a card machine or ATM abroad offers to charge you in your home currency instead of the local one, at an exchange rate the merchant's provider sets. You'll see it as a question on the terminal: "Pay in EUR or AUD?", "Charge in your currency?", or a screen with two amounts side by side.

It feels like a favour. You see a familiar number, so you know exactly what lands on your statement. The catch is the rate behind that number.

Why does it cost more?

Because you swap your card network's exchange rate for one chosen by the shop's payment provider, and that provider adds a margin. The European consumer organisation BEUC compared DCC offers with the European Central Bank reference rate in 2017 and found them roughly 2.6% to 12% worse. One ATM case reached 13.7%.

In Australia, the ACCC gives the same warning: paying in Australian dollars overseas may be the more expensive option, because the overseas bank adds a margin to the exchange rate.

Here's what that looks like on a real-sized purchase. Say a jacket costs €250:

That last row can stack. Some banks still charge their foreign transaction fee on a DCC payment, because the merchant is overseas even though the amount is in your currency. So DCC can cost you twice.

How do you spot it?

Look for any screen, receipt or question that shows your home currency while you're abroad. Common signs:

• The terminal asks you to choose between two currencies, or shows two amounts.
• One button is highlighted or pre-selected, usually the one in your home currency.
• The ATM says "we'll convert this for you" or "accept conversion".
• The shop assistant asks "your currency or ours?" before handing you the terminal.
• The receipt shows an exchange rate, a "mark-up" percentage or the words "currency conversion".

Some terminals time out on the DCC choice and default to it. Read the screen before you tap.

What should you do at the till?

Always choose the local currency. If the terminal shows euros and Australian dollars, pick euros. If it shows yen and pounds, pick yen. Then let your card do the conversion.

1. Tell the cashier before they start: "Local currency, please."
2. Read the terminal screen. Pick the currency of the country you're in.
3. If the receipt shows your home currency anyway, ask them to cancel and run it again.
4. At an ATM, decline the conversion offer. You may need to tap "decline", "without conversion" or "continue in local currency".

That's it. It costs nothing to say no, and in the EU you have the right to.

What do the rules say?

In the EU, DCC is allowed, but the offer has to be transparent. Regulation (EU) 2019/518 (now codified as Regulation 2021/1230) requires the terminal or ATM to show the mark-up over the latest ECB euro reference rate before you pay, and you must be able to refuse it and pay in the merchant's currency.

What the rules don't do is cap the mark-up. Nobody limits how much worse the DCC rate can be. They only make sure you're told. So the protection is the choice itself, and it works only if you use it.

Outside the EU the rules vary, and many countries have no DCC-specific disclosure rule at all. That's one more reason to make "local currency" your default everywhere.

Does a travel card fix it?

No, not on its own. A no-fee travel card removes your bank's foreign transaction fee, which is a real saving. But if you accept DCC, the shop's mark-up is already inside the amount charged, and your card can't take it back out. Choose the local currency and the no-fee card does what it promises.

Want to know what your own card costs abroad? Our guide to foreign transaction fees explains how they work, and the currency converter shows the mid-market rate to compare against.

How Priceglot helps

Priceglot's price sheet shows what a tag costs on your card and repeats one line every time: always pay in local currency. When you log a purchase on a trip, it records the price in the local currency, so your spending totals don't hide a DCC mark-up you didn't notice.

Questions

Should I pay in local currency or my own currency?

Pay in the local currency. When you choose your own currency, the shop's or ATM's provider converts the price at its own rate, and consumer group BEUC measured those rates at roughly 2.6% to 12% worse than the European Central Bank reference rate. Paying in local currency leaves the conversion to your card network, which is usually much closer to the mid-market rate.

Is dynamic currency conversion a scam?

It's legal, and in the EU the terminal must show you the mark-up before you pay. But it almost always costs more than letting your own card convert the price, so treat it as an expensive option you can decline, not a service.

What if the shop already charged me in my home currency?

Check your receipt. If it shows two currencies and an exchange rate, you were charged with dynamic currency conversion. Ask the shop to void the payment and run it again in local currency. If you've left, contact your card issuer and ask whether they can help, and keep the receipt.

Do ATMs use dynamic currency conversion too?

Yes. Many ATMs abroad offer to charge you in your home currency, often with a screen that makes the conversion look like the safe choice. Decline it and withdraw in the local currency. The highest mark-up BEUC recorded in its 2017 paper was an ATM case at 13.7%.

Does a no-fee travel card protect me from dynamic currency conversion?

No. A no-fee card removes your bank's foreign transaction fee, but if you accept the shop's conversion, its mark-up is already baked into the amount charged. You still need to choose the local currency to get the benefit of the card.

Sources

• Regulation (EU) 2019/518 amending Regulation (EC) No 924/2009 (EUR-Lex)
• Regulation (EU) 2021/1230 on cross-border payments, codified (EUR-Lex)
• ACCC: Foreign currency and money exchange
• BEUC: Dynamic currency conversion position paper (BEUC-X-2017-118)

Sources checked 2 November 2026.