News

Study: The time is right for DCC

February 20, 2014

Designed to benefit acquiring financial institutions, merchants and consumers alike, dynamic currency conversion leverages the global nature of card networks to provide eligible cardholders the ability to convert a transaction into a chosen currency at a competitive exchange rate.

Today, DCC solutions are sparking industry interest in both financial and retail sectors as the payments industry looks to increase revenue at the ATM and POS while providing added value to consumers. And interest in DCC is expected to rise — along with rates of international travel in coming years.

Mercator Advisory Group's latest research note, "Dynamic Currency Conversion: A Growing Global Opportunity," examines DCC and its potential benefits to acquiring FIs, merchants, and consumers around the world.

The note also profiles leading DCC solution providers and explores issues that could limit the growth of DCC.

Tristan Hugo-Webb, associate director of the international advisory service at Mercator Advisory Group and primary author of the note, said:

In recent years, industry buzz about dynamic currency conversion has amplified. The reason is clear: DCC is emerging at a perfect point in the global payment industry's evolution.

In 2014 and for the foreseeable future, international travel is expected to rise. The United Nations World Tourism Organization estimates that by 2030, international tourist arrivals will exceed 1.8 billion annually, which translates to a robust, yet consistent market demand for foreign exchange transactions.

Highlights of the research note include:

• global and regional estimates for international travel in 2014;
• an explanation of how DCC works and how it can benefit retailers, FIs and consumers;
• an overview of potential issues around consumer use of DCC;
• an exploration of the potential impact of a merger of Visa Inc. and Visa Europe; and
• profiles of leading DCC solution providers.

One of four exhibits in the 13-page research note: