Abstract
DCC is a service enabling instant currency conversions for card-based transactions. DCC was introduced in 1996 to allow cardholders to pay in their home currency when making payments in foreign currencies.
By using the DCC service, the amount of the transaction in the local currency is instantly converted into the currency in which the cardholder's account is held. DCC has long been criticised for high exchange rate mark-ups - while the average mark-up across Europe is around 5%, a 2019 study also found an extreme case of 13.7% cost differential from paying in euro rather than in Czech koruna at an ATM in the Czech Republic.
This article explains the problems with DCC and analyses the EU legislation aiming to mitigate these issues.