By Thomas Dodd (Associate Consultant)
As international travel and global ecommerce continue to surge post-Covid, increasingly more merchants are adopting solutions like Dynamic Currency Conversion (DCC) and Multi-Currency Pricing (MCP).
But public perception, especially of DCC, remains primarily negative, frequently dismissed and depicted in the media like a costly trap for unwitting travellers.
So why the negative press? And most importantly, what can DCC providers, and their partnering merchants do to improve the image of this solution and encourage consumer adoption?
The World Travel & Tourism Council predicts international visitor spending will hit $2.9 trillion by 20351, up from $2.1 trillion in 2025. In the meantime, in the UK, outbound tourist spending has already exceeded pre-Covid levels by over £10bn, reaching £72.4bn in 20232. At the same time, global B2C ecommerce continues to grow, with spend forecast to grow at 4.4% CAGR and exceed $5.5tn by 2027.3
These trends underline the importance and complexity of cross-border payments, and solutions like Dynamic Currency Conversion (DCC) and Multi-Currency Pricing (MCP) are payment providers’ response to make spending abroad easier for consumers, whilst also acting as an important tool for merchants to help increase international sales.
Both solutions enable merchants to display prices in the home currency of the consumer, eliminating the need for consumers to calculate manual currency conversions when making purchases, or surprises on the bank statement.
So why have DCC and MCP received very differently by consumers and commentators?
DCC is often portrayed negatively in media headlines, seen as an unnecessary or sneaky charge imposed on unsuspecting travellers.
But these critiques often overlook a key fact: most consumers already pay foreign transaction fees, typically ranging from 2–3%, when they pay in a foreign currency. Unlike these bank-imposed fees, which are often buried in the fine print or only visible on bank statements, DCC fees are shown transparently at checkout.
Uber’s recent launch of Preferred Currency Pricing, for example, was viewed harshly by commentators, seen as a covert way to overcharge customers, despite the associated 1.5% fee, being lower than the 2–3% foreign transaction fees charged by many cards.4
In fact, KAE research reveals that most travellers underestimate what they pay in foreign transaction fees (unless they have a foreign transactions fee free card), contributing to the perception that DCC is always the more expensive option. In reality, DCC can be as affordable - or even more so - than the alternative.
MCP offers the same benefit (pricing clarity in the shopper’s home currency) but is generally framed more positively. This is despite the fact that DCC displays the rate being applied to a transaction, unlike MCP, which requires the customer to manually convert the price in the currency of the merchant and then calculate the exchange rate. MCP solutions can even apply less favourable exchange rates, as they are not dynamic, and therefore hedge against currency fluctuation, raising the price. One reason for the relative positivity is that MCP articles are typically marketed to merchants, whereas DCC is more targeted to consumers.
Despite its reputation in some corners, Dynamic Currency Conversion can deliver real value to travellers, particularly when it’s offered clearly and transparently.
KAE research shows that many consumers see a clear benefit in being able to pay in their home currency. It helps them better understand the cost of a transaction, track their spending abroad more easily, and brings a welcome sense of familiarity and control at the point of purchase.
This is especially true when travelling to destinations with less familiar currencies or volatile exchange rates. As international travel patterns shift, this utility becomes even more important. In 2023, outbound visits from the UK to countries outside Europe and North America rose by 37% compared to the previous year5. For these travellers, trying to calculate value for money - say, converting pound sterling to Philippine pesos at £1 = 74 PHP - can be a real point of friction. DCC helps ease that burden, replacing confusion with clarity.
But consumers convinced that DCC is a rip off will continue to choose local currency at point of sale, ignoring the DCC option.
Reframing DCC as a choice that offers clarity and control, rather than a hidden cost should be a key priority for DCC solution providers and their partners.
The value of DCC is often obscured by a widespread lack of awareness about the alternatives. To unlock DCC’s potential, providers must focus on two things: education and transparency. While making it clear that DCC is optional, they also need to be able to demonstrate that it often costs no more than what consumers are already paying through their bank.
By highlighting the comparison, and by presenting the offer in a transparent and customer-centric way, DCC providers and merchants can accelerate adoption by shifting the perception of DCC from a hidden trap to a useful tool that helps travellers feel more confident and in control, wherever they are in the world.
At KAE, we specialise in helping payment providers understand their customers, fine-tune their propositions, and craft target marketing, pricing and communication strategies. Our insights can help refine your product experience to better meet consumer needs, while our go-to-market and messaging strategies ensure your value proposition is clearly and compellingly communicated, whether to consumers, merchants, or partners.
If you’re designing, enhancing, or repositioning your DCC or MCP solution, or you are developing your GTM messaging and campaign we’d love to help you navigate the complexity, aligning your messaging with customer needs, and unlock growth.