What Is Dynamic Currency Conversion?

Dynamic currency conversion is a process that is offered by several credit cards as well as third-party payment processors. This feature allows an individual to use her credit card in a foreign country to make a payment with the money automatically converted into the proper currency for the transaction. This is designed to be much more convenient for cardholders and merchants in foreign countries.

For example, if an individual from the United States is traveling to Japan and makes a purchase with her credit card, this service can be used. The price for the goods will be listed in yen. When the card is run at the store in Japan, the cardholder's account will be charged in US dollars. The account of the merchant will be credited in Japanese yen. This helps the customer avoid having to convert cash into yen when traveling.

When the receipt prints out for the transaction, it will feature the amount of money that is being spent in dollars as well as the amount of money that is being paid in yen. 

The currency conversion rate will fluctuate every day based on the exchange rate between the two currencies in the market. The credit card company will generally charge a premium on the rate.

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