International visitors using FNB ATMs in South Africa can now see how much a cash withdrawal will cost in their home currency before completing the transaction, with the bank extending Dynamic Currency Conversion across its ATM network.
The service gives international cardholders a choice between completing the withdrawal in their home currency or in South African rand. FNB says the rollout has now been completed across its ATM network nationwide, extending a feature it already offers international customers making purchases through its Speedpoint terminals.
Dynamic Currency Conversion, usually shortened to DCC, converts the rand value of a transaction into the currency associated with an international card before the cardholder accepts it. In practice, a visitor from the UK could see a withdrawal expressed in pounds, while an American traveller could see the equivalent in US dollars rather than having to work out the conversion afterwards.
FNB already offers Dynamic Currency Conversion through its merchant services, where eligible international cards can be presented with the option of paying in rand or their home currency at participating Speedpoint terminals. FNB says the ATM expansion is intended to give travellers a more consistent experience whether they’re paying for something or withdrawing cash.
The ATM technology is being provided through Fexco, which has a longstanding partnership with FNB. Fexco’s DCC platform for ATMs displays the exchange rate and margin before the user accepts the conversion, allowing the cardholder to see the home-currency amount before completing the withdrawal.
“International visitors want convenient access to cash and greater certainty when managing their money while travelling,” John Mlangeni, CEO of Merchant Services at FNB, said. He added that the service is intended to make the value of a transaction easier to understand before a customer decides how they want to proceed.
Seeing the conversion doesn’t necessarily make it the cheaper option
The added visibility is useful, but travellers shouldn’t assume that choosing their home currency will automatically result in the lowest cost.
DCC is optional, and the choice of currency determines who performs the conversion. Choosing the home-currency amount means accepting the conversion being offered at the ATM. Choosing rand instead generally leaves the currency conversion to the cardholder’s own bank or card issuer.
That difference can affect the final amount paid. Visa advises travellers that paying in local currency can sometimes be cheaper, noting that a home-currency conversion may include a markup. Mastercard gives similar guidance for its South African Cash Passport customers, recommending that travellers choose the local currency when offered DCC to avoid the possibility of additional foreign-exchange costs. (Visa)
That doesn’t make FNB’s new option pointless. It gives visitors information they previously might not have had at the ATM and, crucially, still allows them to decline the conversion. Someone who values knowing the exact home-currency amount immediately may prefer DCC, while another traveller may decide that letting their own bank handle the exchange provides better value.
The distinction is particularly relevant as payment systems increasingly give consumers more ways to choose how a transaction is processed. South Africa’s payments market has already been moving towards greater choice across cards, account-to-account payments and newer digital payment methods, something visible in the way local payment infrastructure is being rebuilt around a much broader mix of payment options. (Reframed)
FNB’s ATM rollout applies that same idea to a much older banking habit: taking cash out of a machine. The useful part isn’t that an ATM can convert currencies. DCC has existed for years and Fexco already provides the technology to ATM operators in other markets. What changes for international visitors using FNB in South Africa is that they can now see the alternative before making the withdrawal and decide which conversion route they’d rather use.
FNB says the service will be available across thousands of locations around South Africa through its ATM network.