Paying by card abroad — what happens if you pay in your own currency?
One question at the till.
At a till or cash machine abroad, the card screen asks: “Pay in the local currency, or in your own?” What that question really means, and how the price changes with your answer.
In 30 seconds
- If you pay in your own currency, the merchant’s side converts on the spot (dynamic currency conversion). The rate usually carries a mark-up.
- In a study gathered by the European consumer organisation, 1,500 cases checked by a Norwegian bank showed an average mark-up of 7.6% and up to 12.4% (2016).
- The EU requires the mark-up to be shown as a percentage over the European Central Bank’s reference rate, before you pay. Card scheme rules also require that you are given the choice and not steered.
One question on the screen.
Pay in the local currency, or in your own? The choice is yours.
Which currency would you like to pay in?
If you choose the local currency
Your card issuer converts it later.
If you choose your own currency
The merchant’s side converts on the spot. The rate usually carries a mark-up.
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Conversion by the merchant’s side
If you choose your own currency, the merchant or cash machine operator converts on the spot. This is called dynamic currency conversion.
The card scheme’s rules
Visa says that merchants and cash machines must let you choose whether to accept or decline the conversion, must not choose for you, and must not steer the choice with type size or colour. It also requires the amount in both currencies, the exchange rate used and the mark-up to be shown.[1]
The price changes with your answer.
Conversion by the merchant’s side usually carries a mark-up.
Average mark-up on merchant-side conversion, checked by a Norwegian bank (1,500 cases, 2016)
Up to 12.4%. An old European study; it may not apply to today’s countries or shops.
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The study’s figures
According to material compiled in 2017 by the European consumer organisation BEUC, a Norwegian bank checked 1,500 cash withdrawals in 2016: choosing the home currency cost 7.6% more on average and up to 12.4% more. In only 4 of the 1,500 cases was it cheaper than the local currency.[2]
A German consumer organisation’s study found the home currency cost 2.6–12% more at cash machines and 2–5% more when paying in shops.[2]
Europe requires the mark-up to be shown.
In the EU, the conversion mark-up must be shown as a percentage over the European Central Bank’s reference rate.
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The EU rule
EU Regulation 2021/1230 requires the cost of currency conversion in card payments to be shown as a percentage mark-up over the latest ECB reference rate. Before payment, the amount must be shown in the payee’s currency and in the currency of your account, and you must be told that you can pay in the payee’s currency and let your own bank convert later. After payment, an electronic message discloses the mark-up.[3]
Elsewhere, the card scheme’s rules do the work.
Where there is no law like the EU’s, card scheme rules support what is shown on screen.
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What we checked
This edition checked the EU regulation and the published rules of one card scheme (Visa). Laws in other countries and regions were not checked this time.[1][3]
If you feel pressured
Visa advises that if the required information is not shown, or you feel pressured to choose, you should decline the conversion and tell your card issuer.[1]
Three numbers to read at the till.
The three numbers that should appear on the screen, set out as a scale.
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The amount in both currencies
Whether the amount is shown both in the local currency and in your own.[1][3]
The rate
Whether the exchange rate used is shown.[1]
The mark-up
Whether the mark-up (the charge) is shown. In the EU it is shown as a percentage over the reference rate.[3]
This is not advice
This edition explains how conversion and its rules work. It does not advise which option you personally should choose.
Next question
NEXT QUESTIONThe largest market in the world has no building.NEXT QUESTIONA world that will not give up its 150-odd wallets.See the Field Notes shelf →What this edition cannot tell you
- A current worldwide average for merchant-side conversion mark-ups. No up-to-date official statistic was found.
- Legal rules in countries and regions outside the EU.