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Part of a credit card slip, indicating that DCC takes place. DCC services are generally provided by third party operators in association with the merchant, and not by a card issuer. Card issuers do not provide cardholders with a DCC option at the point of sale, but these two card networks permit DCC operators to offer currency conversion in accordance with their card processing rules. Without DCC, the currency conversion is carried out by the card issuer when the transaction is charged to the card holder’s statement, usually a day or two later, but for an increasing number of cards in real time. Even though the card issuer will publish the exchange rate used for conversion on the statement, most do not disclose the exchange rate used to convert a transaction at the time of payment. With DCC, the currency conversion is done by the merchant or their card processor at the point of sale.
Unlike a credit card company, a DCC operator must disclose the exchange rate used for conversion at the time of the transaction according to credit card company rules which govern how DCC is offered. Proponents of this service believe that customers can better understand prices in their home currency, and this makes it easier for business travelers to keep track of their expenses. They also point out that the customer has full transparency inclusive of conversion fees, and can make an informed choice whether or not to use DCC. Opponents of the service believe that customers do not understand DCC, and point out that DCC exchange rate markups are mostly higher than the card issuers’ currency conversion fees that DCC avoids, and therefore, in almost all cases, opting for DCC will result in a higher charge to the cardholder. A dynamic currency conversion service was offered in 1996 and commercialized by a number of companies including Monex financial services and FEXCO.