B6 Dynamic currency conversion (DCC)
Needs: Supporter
Letting a foreign cardholder pay in their own currency: eligibility, the rate and markup, the cardholder's choice and the receipt, the amounts in the messages, refunds, and how DCC compares with the network's conversion.
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What this module covers
You will be able to
- Explain DCC: who offers it, who sets the rate and who earns the margin
- Decide when DCC may be offered (BIN lookup, currencies, brands, rate validity)
- Compute the DCC amount with each currency's decimals, and the markup over a reference rate
- Encode and read an ISO 8583 conversion rate (fields 9 and 10)
- List what the cardholder must see before choosing and on the receipt ⚠
- Handle refunds, reversals and pre-authorisations of DCC sales
- Plan the tests of a DCC terminal and host
The lesson
- Why it matters
- The concept
- The rate, the markup and rounding
- In the messages
- Refunds, reversals and pre-authorisations
- Common mistakes
- What to test
- Try it
In the module
- The lesson, with diagrams, common mistakes and what to test
- A worked example you can change: A DCC purchase, and what it costs the cardholder
- Practice: 6 kinds of generated exercise, each with a step-by-step solution
- A quiz of 11 questions
Key terms
- Cardholder billing currency
- The currency of the cardholder's account (field 51). Without DCC, the network converts the transaction into it.
- Conversion rate field (Fields 9 and 10)
- An n 8 rate: the leftmost digit is the number of decimal places of the other seven digits, so 61352741 is 1.352741.
- DCC markup (Margin)
- What the DCC rate adds to a reference rate, shown as a percentage before the cardholder chooses ⚠.
- Dynamic currency conversion (DCC)
- Charging a foreign card in the cardholder's own currency at the point of sale or ATM, at a rate the merchant's DCC provider sets, when the cardholder chooses it.
- Multi-currency pricing
- Prices the merchant sets in several currencies in advance, common online. Unlike DCC, nothing is converted at the moment of payment.
- Network currency conversion
- The conversion the card network makes when the cardholder pays in the merchant's currency; the issuer may add a foreign transaction fee.
- Reference rate
- A published exchange rate used to show a DCC markup, such as the European Central Bank's euro reference rates in the EEA ⚠.
The lesson, worked example, practice and quiz open with a supporter pass, which you can try free for 7 days.