"Would you like to pay in your home currency?" is a question that usually costs you money — and EU law requires the true cost to be shown before you say yes.
What Dynamic Currency Conversion Actually Is
Dynamic Currency Conversion (DCC) is the option, offered at many ATMs and card payment terminals abroad, to have your transaction converted into your home currency on the spot and charged in that currency, rather than letting your own bank or card network handle the conversion afterward. It's typically presented as a convenience — knowing exactly what you're paying in familiar currency — but the exchange rate used for DCC is set by the local merchant or ATM operator, and is almost always less favorable than the rate your own card network would apply.
The Transparency Requirement Under Regulation (EU) 2019/518
Regulation (EU) 2019/518, which amended the cross-border payments regulation, specifically targets this practice by requiring that before you confirm a DCC payment, you must be shown the total cost of the currency conversion expressed as a percentage markup over the most recent available European Central Bank (ECB) reference exchange rate. This is meant to let you directly compare the DCC option against simply paying in local currency and letting your own card issuer convert it — rather than facing a vague "pay in EUR/USD/GBP" choice with no cost comparison shown.
What to Do If You Weren't Shown This Information
If you were charged via DCC without being shown the percentage markup over the ECB reference rate before confirming the transaction, that's a transparency violation — not just an unfavorable rate you happened to accept. You're entitled to request the actual markup that was applied and can dispute the charge on the basis that you weren't given the legally required information to make an informed choice.
What This Means for You
- Always decline dynamic currency conversion at ATMs and terminals abroad — pay in the local currency and let your own bank or card network handle the conversion, which is almost always cheaper.
- If you're offered DCC, check whether the percentage markup over the ECB reference rate is actually displayed before you confirm — this display is a legal requirement, not optional.
- If you were charged via DCC with no markup disclosure shown, dispute the charge with your card issuer, citing the missing transparency requirement.
- Keep the receipt or transaction confirmation showing (or failing to show) the DCC terms as your evidence.
Related Kibbo Tools
Sources
- Oesterreichische Nationalbank — SEPA Legal Framework, Regulation (EU) 2019/518. oenb.at
- European Payments Council — SEPA political, legal and regulatory framework. europeanpaymentscouncil.eu