Dynamic Currency Conversion

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What is DCC?

Dynamic Currency Conversion (DCC), also known as Cardholder Preferred Currency (CPC), allows customers to make card payments in their home country’s currency, providing price clarity during international transactions. This feature offers transparency by showing the total cost in a familiar currency, thus helping customers avoid the hassle of manual conversion and preventing surprise fees often levied by their card issuer.

For merchants, DCC can increase conversions for global customers by offering a smooth, transparent purchasing experience. Cashfree emphasizes seamless international payments, and DCC aligns with this by enhancing the checkout experience for cross-border buyers.

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Key Benefits of DCC:

• Price Transparency: Customers see the exact amount in their home currency.
• No Hidden Charges: Avoid unexpected currency conversion fees charged by the issuing bank.
• Enhanced Customer Experience: Customers appreciate the control over the final price, which can lead to higher transaction volumes and reduced cart abandonment.

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How to Enable DCC for Your Account:

To activate DCC for your merchant account:

• Contact your Account Manager.
• Alternatively, you can send an email request to care@cashfree.com for activation assistance.

Once activated, DCC will be available during the checkout process.

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Payment Flow with DCC Activated:

1. Order Creation: Use the Create Order API of Cashfree to generate an order.
2. Checkout Redirect: Redirect the customer to Cashfree’s Checkout Page using Cashfree’s Integration Suite (see our integration documentation for more details).
3. Currency Options Display: On the checkout page, the customer will have two options:
   • Order Currency: The currency selected by the merchant for the order.
   • Cardholder’s Home Currency: The cardholder’s native currency, provided through DCC.
4. If the customer selects the home currency, a conversion fee will be applied by Cashfree, which will be transparently displayed to the customer.
5. Please note in either of the scenarios merchant will get settlement as per order amount and currency

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Important Merchant Considerations:

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Visa Rules for Offering DCC:

When offering DCC, merchants must comply with Visa’s guidelines, which emphasize transparency and consumer choice. Merchants are required to:

• Display both currency options (order and home currency) to the cardholder.
• DCC Mark-up should be displayed on the screen
• Clearly indicate any conversion fees associated with the transaction.
• Ensure that the customer actively chooses their preferred currency.

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Reversals and Refunds:

Merchants must follow specific guidelines for reversing or crediting transactions that involved DCC at the point of sale. If a refund is necessary, the refund must be processed in the same currency in which the transaction was completed (either the merchant’s or the cardholder’s home currency).

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Dispute Resolution:

Merchants should be aware of the potential consequences if a cardholder disputes a DCC transaction with their issuer. It’s essential to maintain a transparent record of the customer’s currency choice to defend against chargebacks effectively.

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Compliance Risk:

Visa retains the right to withdraw a merchant’s eligibility to offer DCC if these guidelines are not followed, which can impact future international transactions.

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DCC - Best Practices for Merchants:

• Communicate Clearly: Ensure customers understand their currency options and any fees that may apply.
• Monitor Conversion Rates: Regularly check conversion rates and fees to ensure they remain competitive.
• Seamless Integration: Follow Cashfree’s integration guidelines to provide a smooth checkout experience.

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Additional Guidelines from VISA:

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The process for reversing/crediting transactions at the point of sale

• In case you want to initiate reversal kindly use Cashfree’s Merchant Dashboard or Cashfree’s APIs to do the same
• In case you face any challenges in performing the reversal reach out to care@cashfree.com
• Reversal of a DCC transaction should happen in the same currency in which transaction was happened

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Potential consequences if cardholders dispute DCC transactions with their issuer

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When would you get this notification?

• The transaction was processed with an incorrect currency code (i.e., the transaction currency is different from the currency transmitted through Visa; or the cardholder was not advised or did not agree that Dynamic Currency Conversion (DCC) would occur).

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What caused the dispute?

• There are two common causes for this type of dispute:
  • The transaction currency is different from the currency transmitted through Visa.
  • The cardholder claims that you failed to offer them a choice of paying in your local currency or that they declined to pay in their local currency.

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How should I respond?

• Correct transaction currency was used to complete the transaction. Provide your card processor with documentation such as:
  • Evidence that the cardholder actively chose DCC
  • A copy of the transaction receipt
• The transaction was processed incorrectly. Accept the dispute.
• Credit or reversal has already been processed for the transaction. Provide documentation of the credit or reversal that includes the amount and the date it was processed.
• The cardholder no longer disputes the transaction. Provide a letter or email from the cardholder that states they no longer dispute the transaction.