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Tap into International Markets for Increased Growth and Revenue
By Brian Frey, Senior Director of Product Management 
And John Staple, Product Manager - First Data International Currency Solutions

December 4, 2014

The world is getting smaller. We hear that all the time. But those who work in retail and travel & entertainment see it first-hand. Today, you help a customer from Europe; tomorrow it may be a customer from Japan. You want to give them the best shopping experience possible! Fortunately, there is a service that can help you provide an enhanced purchase experience to international customers, providing transparency and choice in how they pay. With Dynamic Currency Conversion (DCC), your customers have the choice to pay in their own currency.

Without DCC, international travelers who use their Visa® or MasterCard® branded cards will have their payment converted at an undisclosed exchange rate and may face additional fees from their issuing bank. International shoppers often do not know the actual cost of their purchase until they receive their card statement. With DCC, you will have a tool that enables you to provide a personalized service that you begin providing the minute that customer walked in the door.

Why DCC?

The U.S. Department of Commerce 1 projects international travel to the United States will continue to experience strong growth through 2019. Visitor volume in 2014 is expected to jump by 5.9% and reach an estimated 73.9 million visitors. This growth builds on the 4.7% increase in arrivals seen in 2013, which resulted in a record 69.8 million visitors. With continued growth in international travelers comes economic opportunity. 

According to the U.S. Office of Travel and Tourism Industries2, international visitor spending is at a record high. This is especially important during challenging economic times when businesses need to be creative in finding new ways to attract customers and drive revenue. Savvy businesses realize that a very sizeable opportunity exists with international shoppers who continue to spend money in the United States.

Dynamic Currency Conversion (DCC) is an innovative solution that allows merchants to offer most international consumers, using Visa or MasterCard branded Cards, the ability to pay in their card account billing currency using a guaranteed exchange rate. With DCC, there are numerous benefits for merchants:

  • Increased customer confidence with transparency of cost in their currency of choice.
  • Reduced chargeback risk and exposure as customers easily recognize their purchases on their card statement. Their receipt will match the amount shown on the card statement.
  • Elimination of chargeback currency fluctuation. Today, chargebacks for internationally issued cards are converted back to the merchant’s base currency at the prevailing rate of exchange at the time the chargeback is issued. With DCC, most providers will guarantee the rate of exchange on chargebacks ensuring you are not debited more than you actually collected from the sale.
  • Added revenue from earned currency conversion commission.
  • Most DCC providers offer a wide variety of reporting which can be used by your marketing teams to focus marketing budgets and other business decisions.
  • Attract new business by offering international customers the ability to pay in their currency of choice.

First Data provides a world-class DCC solution to meet the needs of any merchant. This solution has helped tens of thousands of merchant locations tap into this growing international market by using DCC. We have established a unique model that has been tested and proven with merchants known around the globe.   

Our DCC offering includes guaranteed exchange rates eliminating currency exchange risk for both the consumer and the merchant. The currency conversion revenue share merchants generate from this service also helps offset card association fees directly related to the acceptance of international cards. Essentially, every international transaction becomes an opportunity for additional revenue while promoting a customized purchase experience.

All DCC services are not the same and you are encouraged to ask questions of any provider and ensure that you are working with someone who really understands the market and provides added value. When considering DCC, you should evaluate the following key items to help you make the right choice:

  • How long has the DCC provider been providing this type of service?
  • Does the provider service businesses today in your country?
  • Does the provider have industry experts on hand with the knowledge you need to implement DCC and act as your trusted advisor?
  • Are you certain where your transactions will process? Ensure that the processing environment is tested and proven and has the best security protecting your data.
  • Does the provider have a robust reporting system that offers added value that can provide your business with mission critical data beyond DCC performance?
  • Does the provider have a significant portfolio of clients demonstrating superior product?
  • Does the provider use a well-known, published wholesale interbank exchange rate as their base rate?
  • Is the proposed solution a bolt-on offering or integrated with your acquirer?

1 National Travel and Tourism Office (NTTO) 2014 Fall Travel Forecast, 10/22/14
U.S. Department of Commerce, Bureau of Economic Analysis, 09/17/14