Whine Wednesdays: Dynamic Currency Conversion (DCC) Scam


When you are checking out of a hotel, at a retail outlet or withdrawing money from an ATM, you may be asked if you would like to pay in the currency of your card instead of the currency of the country you are in.

This is called Dynamic Currency Conversion (DCC) and you should ALWAYS decline.


The merchant is offering (read PUSHING) this service because the company that is providing this facility is splitting the 2.1% to 4% foreign exchange margin with them.

You can read my experiences with the evil Credit Suisse ATM’s in Zurich (here), forced HKD to USD conversion at the HKG airport using Citibank ATM (here), and using Travelex ATM’s at the London’s Heathrow airport (here).

Here’s how this is sold to hotels and retail outlets

Download (PDF, 434KB)

Here’s copy of one processor’s marketing material.


Above are the main points from this two page PDF summarized.

Note that both Visa & MasterCard are using realtime exchange rates and they/your bank typically charges a one or two percent fee for foreign transactions.

Even if you “agree”to the Dynamic Currency Conversion your bank is likely to charge you the foreign transaction fee due to the purchase being made outside of your home country.

Essentially, you are paying for the same service twice; first to the merchant in the form “fake” exchange rate with built in margin + to your bank in the form of this foreign transaction fee.

The merchant is always supposed to ask you whether you want to use this facility or not, but that is not always the case.

Sometimes the clerk might say that the charge is in local currency despite the charge slip showing the currency of your credit/debit card. If the currency of your card is shown on the receipt, the Dynamic Currency Conversion is being used and you should request them to charge it in local currency. Sometimes you may have to get manager involved, as educating front desk clerks about this profitable “scam” for the hotel doesn’t seem to be too high on their priority list.

As you can see from the receipt above, I was getting scammed at the Ritz-Carlton Kuala Lumpur last week. The clerk was insisting that the charge was NOT going though in USD, but obviously this was not the case.

The foreign exchange spread was exactly 2.1%. I calculated that on the spot using xe.com. As the hotel screwed up the transaction, they agreed to reimburse the spread in local currency.


Dynamic Currency Conversion (DCC) is nothing more than the merchant and their card processors trying to generate extra profits by providing “service” that Visa and MasterCard would for for free or far less.

When you are presented with the offer to pay in the currency of your card, you should ALWAYS decline.

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