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Dynamic Currency Conversion Explained For Travelers In Colombia
Foreign cardholders in Colombia are asking new questions about Dynamic Currency Conversion (DCC) after reports of adjusted credit card transactions surfaced across multiple countries and banks. This guide explains DCC in plain English, why payment terminals ask "Pesos or Dollars?", and what every traveler should know before using a credit card in Colombia.
BUSINESSTRAVELEXPATS
Steve Hamilton
6/1/20262 min read
What Is Dynamic Currency Conversion And Why Should Travelers Care?
After receiving 293 reports from foreign cardholders who noticed old transactions changing months after purchases were made in Colombia, one term kept appearing throughout the investigation: Dynamic Currency Conversion, better known as DCC. Most travelers have encountered it without realizing what it actually does. You're sitting in a restaurant in Medellín, the bill arrives, you tap your card, and the terminal suddenly asks a simple question: "Would you like to pay in Pesos or Dollars?" Most people choose Dollars because it feels familiar and easier to understand.
What most travelers don't realize is that this choice determines who performs the currency conversion. If you choose Pesos, the transaction stays in Colombian pesos and your bank or card network usually handles the conversion later. If you choose Dollars, the conversion happens before the transaction reaches your bank through a process known as DCC. In simple terms, DCC shifts control of the conversion away from your bank and into another part of the payment chain.
The reason DCC exists is straightforward: money. The company performing the conversion has an opportunity to earn revenue from the exchange rate being used. That is why travel experts have spent years recommending that international travelers select the local currency whenever possible. In Colombia, that generally means choosing Pesos instead of Dollars because the exchange rate is often more favorable.
This became particularly relevant after Credibanco acknowledged that certain DCC transactions contained discrepancies and were later subject to operational adjustments. According to the explanation provided, some transactions were refunded and then re-submitted months after the original purchase occurred. For many consumers, that was surprising because most people assume that once a credit card transaction settles, the transaction is complete, the merchant gets paid, and the charge becomes final.
Whether those adjustments were justified or not, the larger lesson remains simple. Pay attention when the payment terminal asks whether you want to pay in Pesos or Dollars because that screen is doing far more than deciding which currency appears on your receipt. It determines who performs the conversion and how the transaction moves through the payment system. As this investigation continues, one question remains especially important: if you experienced one of these adjustments, when the terminal asked "Pesos or Dollars?" what did you choose?
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