Currency Exchange Guide · Cards & Payments · Last checked 21 October 2026

Dynamic Currency Conversion (DCC) Explained: What It Is and How to Decline It

You pay by card or take money from an ATM abroad, and the screen asks whether you want to be charged in the local currency or in your home currency. Choosing your home currency seems like the easy, sensible option. This guide outlines what Visa and Mastercard say about that screen, what a consumer council and a bank measured when comparing the two options, and what it means for Indian travellers. It is upfront about what we could not confirm. We did not measure DCC ourselves, so we give no fixed percentage.

The short version

• DCC is an offer made by a merchant or ATM to convert the charge into your home currency. Visa says the offer comes with an exchange rate and additional fees. Mastercard states it is not a Mastercard product and that the markup is set by the merchant, ATM owner and their acquirer.
• Visa says merchants and ATMs must let you accept or decline the conversion and must not choose for you. Declining does not stop you from paying or withdrawing cash.
• Neither network gives a typical percentage. Mastercard says a markup does not necessarily reflect a comparison to market exchange rates.
• The one measurement we found is old and from Europe. A Norwegian bank's 2016 study of 1,500 Visa debit card ATM withdrawals found that paying in the home currency cost more in 99.7% of cases, with the biggest gap at 12.4% against Visa's official rate.
• A card with no forex markup removes the issuer's charge. DCC is a separate charge made by the merchant or ATM, so the sources suggest the card does not protect you from it.
• The simplest rule is the one most sources give: when asked, choose the local currency.

What DCC is

Visa's page on dynamic currency conversion (last modified 31 August 2023 according to its metadata) says it is when a merchant or ATM offers to convert your purchase or withdrawal into your home currency, and that the offer includes an exchange rate and additional fees. Mastercard's merchant guide (copyright 2021) describes DCC as a service provided by acquirers and their merchants or ATM owners that allows a cardholder to choose between the merchant's local currency and their billing currency.

In short, there are two ways to pay for the same item. In one, the shop charges you in euros or baht or dirhams, and your card issuer converts the amount into rupees later at its own rate. In the other, the shop or ATM does the conversion on the spot and show you a rupee figure. DCC is the second one.

What the networks say you must be shown

Mastercard's guide says that before the currency choice is shown to you, the cardholder must be told of their right to choose the currency. They must also see the amount in both the local and billing currencies, the rate that will apply if you pay in the billing currency, and any other fees like commission. The information must be given in English or in the cardholder's native language. The guide also says that a cardholder must not be required or encouraged to use DCC, which it calls "being steered," and that DCC must not be selected in the cardholder's absence.

Visa's page says merchants and ATMs should let you accept or decline and "must not choose on your behalf." It says providers should not use font size or colour to influence your decision, and that merchants and ATMs must display the exchange rate used and any additional fees or markup. The same rules apply at ATMs: if you withdraw local currency and are billed in your home currency, the machine must show the amounts in both currencies, the rate and the fees.

If you do not see these details or feel pressured, Visa recommends that you decline the offer and report the incident to your card issuer. These are the networks own statements about their rules. We could not check how any particular shop or ATM follows them.

Why it costs what it costs

Mastercard's guide says that exchange rates and markups are set by merchants, ATM owners and their acquirers, not by Mastercard, and that "a markup is a commercial agreement between an acquirer and a merchant/ATM owner" which "does not necessarily reflect a comparison to market exchange rates." Since the rate is a private arrangement, there is no standard figure. Neither network gives one. The sample screens in Mastercard's guide use placeholders for the markup, not real percentages.

That is why a flat claim like "DCC costs 5%" or "DCC costs 3%" should be wary. The charge depends on who is offering it. What the networks do say is that the screen must show the rate and any fees, and that is the information you need for the comparison below.

What a study measured

The Norwegian Consumer Council sent a paper to the European Commission on 30 June 2017. It cites a survey by the bank Sparebanken Vest of 1,500 randomly chosen ATM withdrawals in Europe made with Visa debit cards across 16 days in April, May and June 2016. The bank compared each transaction's rate with Visa's official rate for that day, with the bank's own 1.75% currency fee included in the comparison.

• In 99.7% of cases, the customer lost by paying in the home currency, which was Norwegian kroner. Only 4 of 1,500 transactions came out better in the home currency.
• The largest margin against Visa's official rate was 12.4%.
• The bank estimated that its customers alone gave up over 50 million kroner in 2015.

The council also describes ATM screens that use colours, icon placement, warnings and national flags to steer users to the costlier option, which it calls "nudging." It asked for DCC to be banned, or at least for screens to show the final amount in both currencies before the user chooses.

This is a council's input, not a regulator's ruling. The study covers one bank, one card type and one region, and is about ten years old. It tells us what happened in that sample. It does not tell us what DCC costs an Indian traveller today.

A worked example, with made-up numbers

The figures below are made up. They only show how a percentage gap becomes money.

Say your card's normal route values a 200 euro restaurant bill at 102.00 rupees per euro, so the bill is 20,400 rupees. A DCC offer on the terminal shows 21,420 rupees for the same bill.

• The difference is 1,020 rupees.
• As a percentage of 20,400 rupees, that is 5%.

Now an ATM. Say you withdraw the equivalent of 50,000 rupees in local currency, and the machine's DCC offer is also 5% higher. That adds 2,500 rupees, before any fee your own bank or the ATM operator charges. Since DCC is applied to the amount, a bigger withdrawal costs more in rupees.

The way to check is to compare the final rupee figure in the DCC offer with what the mid-market rate would give. Our guide to bank, airport and online exchange shows how to turn a gap into a percentage.

DCC is not the same as a foreign transaction fee

This section is our reading, not a sourced fact. When you pay in the local currency, your card issuer may add its own markup to the exchange rate. Our guide to forex cards sets out what published sources say about those markups and the 18% GST charged on them. When you accept DCC, the merchant or ATM adds its own conversion margin in addition. Mastercard describes the DCC markup as an arrangement between the acquirer and the merchant, which suggests it is separate from your issuer's fee. Declining DCC does not remove your card's own forex markup, and a card with no markup does not remove the DCC margin.

Does a zero-markup card protect you from DCC?

This is also our reading. The sources above say the DCC rate is set by the merchant, ATM owner and acquirer, not by the card issuer or the network. A zero-markup card changes what your issuer charges, but if you accept DCC, the conversion has already been done by the terminal. So a card that is advertised as having no forex markup does not appear to change the decision on the screen. We could not find a source that tests this on a zero-markup Indian card, so check your issuer's terms if you rely on it.

How to recognise and decline it

The screen will usually offer two amounts, one in the local currency and one in your home currency, and ask you to pick. Visa and Mastercard both say you must be given the choice, and the choice must not be made for you.

This section is our advice, based on the sources above.

1. Look for two amounts on the screen or slip, one in the local currency and one in rupees.
2. Choose the local currency. Business Standard (April 2025) also advises avoiding DCC when using ATMs or cards abroad.
3. If the screen is confusing, or the person at the till presses you to choose rupees, you can decline. Visa says declining will not stop the purchase or the withdrawal.
4. Check the receipt. If it shows your home currency, an exchange rate and a markup, DCC was applied.
5. If you were not given a choice, Visa recommends reporting it to your card issuer.

If you notice it after you have paid

This section is our advice, based on the sources above. It is not a sourced fact.

Sometimes you only notice DCC when you read the receipt or the card statement. Visa says the rate and any additional fees or markup must be displayed, so the slip should show both. If it shows your home currency, a rate and a markup, DCC was applied. If the slip shows none of those and you were never given a choice, Visa recommends reporting it to your card issuer. Keep the slip, note the date, the shop and the amount, and ask your issuer what options it offers. We did not find a source that says what Indian issuers do with such reports, so we cannot promise a refund. The easiest fix is the next time: look at the screen before you tap or insert the card.

Two habits help. Read the whole screen before you press anything, because the choice is sometimes shown with the home currency highlighted. And if a shop assistant presses the button for you, ask them to cancel and start again. Mastercard's guide says DCC must not be selected in the cardholder's absence, and Visa says providers must not choose on your behalf.

Where it shows up

Visa and Mastercard name merchants and ATMs as the places that offer DCC, and Visa says the same rules apply at ATMs. The Norwegian study looked at ATM withdrawals in Europe. In practice, any place that takes a card abroad could show the screen, so check the amount and currency each time.

What we could not confirm

• A typical DCC markup today. Neither network gives one, and the one study we found is from 2016, covers Europe and one bank.
• How often Indian travellers are offered DCC, or at what rates.
• Whether Indian rules add anything to the Visa and Mastercard requirements. We did not find an Indian source.
• How well any given shop or ATM follows the network rules.
• Whether a zero-markup card leaves the DCC margin unchanged. We reason that it does, but found no test.
• Whether DCC is offered at hotels, restaurants, car rental counters or online checkout. The networks do not list them.

A simple plan

1. At every terminal or ATM abroad, expect a currency choice and read the screen.
2. Choose the local currency.
3. Compare the two amounts if you are curious, using the worked example.
4. Keep the receipt, and report any case where you were not given a choice.
5. Check your own card's forex markup separately before you travel.

FAQ

What does DCC stand for?
Dynamic currency conversion. It is when a merchant or ATM offers to charge you in your home currency instead of the local one.

Is DCC always more expensive?
We could not confirm that for every case. A 2016 study of 1,500 ATM withdrawals found the home currency cost more in 99.7% of cases, but it covered one bank and one region.

Does declining DCC stop my payment?
No. Visa says declining will not stop you from making purchases or withdrawing cash abroad.

Do I get DCC if my card has no forex markup?
You can still be offered it. The DCC rate is set by the merchant or ATM owner, not by your card issuer.

Can I ask a shop to cancel and redo a DCC payment?
Visa and Mastercard both say the choice is yours and must not be made on your behalf. We could not confirm how any particular shop handles a request to redo a payment.

Who sets the DCC rate?
Mastercard says merchants, ATM owners and their acquirers set the exchange rates and markups, not the network.

Sources and how we checked them

Checked on 21 October 2026. Where we call something confirmed, at least two of these sources agree, or an official source says so directly. Several are not official sources.

• Visa, card network, Dynamic Currency Conversion Explained (UK page, metadata dated 31 August 2023).
• Mastercard, card network, Dynamic Currency Conversion guide (copyright 2021, undated).
• Norwegian Consumer Council (Forbrukerradet), consumer body, input to the European Commission on dynamic currency conversion, 30 June 2017, citing a Sparebanken Vest study.
• Business Standard, newspaper, Buying forex: Compare exchange price offered by seller with interbank rate, 23 April 2025 (partly paywalled).

Editorial note: The counter, rate and airport information in this guide is editorial and is not paid for. Rates and fees change, so confirm the final rate at the counter before exchanging.