Levelling the EU’s currency conversion playing field: promoting inclusion and consumer choice

The EU has the chance to create a payments landscape that empowers consumers in a globalised market

By Gino Ravaioli

Gino Ravaioli is the Chairman of the International Association for Cardholder Transactions Abroad (IACTA).

17 Jan 2024

Currency conversion is central to world trade, yet a hidden world of opaque fees and limited competition threatens to stifle innovation and harm consumers. While the EU’s proposed Payments Services Regulation (PSR) looks to modernise the payments landscape, it overlooks healthy competition in currency conversion services.

In a world with nearly 200 different currencies, consumers’ access to transparent currency conversion services is crucial, enabling them to make informed purchase decisions, wherever they are in the world, online or in-person.

The importance of transparent and affordable currency conversion services

The EU recognises the significance of having transparent and affordable currency conversion services, evident in the Cross-Border Payments Regulation, the Payment Services Directive and Article 5 of the newly proposed Payments Services Regulation (PSR), currently under discussion .

These regulations aim to protect consumers from excessive pricing, guaranteeing clarity about cross-border transactions conversion rates and fees. These goals are to be applauded, but do not account for nuances between currency conversion service providers for card transactions.

Currency conversion services are offered both by card schemes - industry giants like Visa and Mastercard - and third-party providers, also known as Dynamic Currency Conversion (DCC) providers.

DCC providers contribute significantly to consumer choice. Cardholders who elect to pay in their home currency using DCC have real-time knowledge of the full transaction value, including the exchange rate and fees, rather than potentially having fewer details and a less favourable rate applied later by their banks. This allows for better decision-making. Crucially, DCC providers rely on their competitor’s (the card schemes) infrastructure to operate.

Hidden Fees and Stifled Innovation

The proposed PSR addresses access in Article 31, emphasising fairness and non-discrimination, but ambiguities persist around the terms 'access,' both direct and indirect, and risk-type interpretation. It also does not address hurdles faced by DCC providers who can face substantial fees and stringent regulations to access competitor controlled infrastructure, impeding their ability to operate.

If the card schemes were to price out or exclude DCC providers from accessing their systems, consumers would have no alternative, and it would hinder the competition necessary for a thriving and innovative payments market.

Amending PSR to truly address ‘access’

As the PSR proposal undergoes scrutiny by ECON and the Council, it is imperative to address such barriers and there are a number of steps the EU can take.

It could broaden access rights, moving beyond the confines of payment service providers to include currency conversion service providers, better define 'access', and ensure any definition of discrimination encompasses exclusionary pricing practices. It should also clarify terms of recourse and enforcement where third-party providers face discrimination through excessive costs and bureaucracy.

Championing competition: empowering consumers

Empowering smaller players like DCC providers fuels innovation, protects consumers, and ensures a thriving marketplace. The EU now has a critical choice: build a future where competition flourishes or allow giants to tighten their grip.

As such, the EU should now take decisive steps to ensure continued access to payment systems by third-party DCC providers. Only by doing so, can it create the payments landscape it desires, one that empowers consumers in a globalised market.

In partnership with


This article was produced in partnership with IACTA, the International Association for Cardholder Transactions Abroad