Worldline and FEXCO bringing DCC to European ATMs
Worldline and FEXCO have expanded their partnership to offer dynamic currency conversion (DCC) services to ATMs across Europe.
Patrick Brusnahan speaks to Nick Dalgaard, head of acquiring services at Worldline, about this new proposition
DCC provides non-euro cardholders in Europe an option to withdraw money from ATMs when travelling abroad, with full visibility of the exchange rate as well as the knowledge of how much they are withdrawing in their own currency.
To offer DCC services on ATM Networks to European Independent ATM Deployers (IAD’s) and Financial Institutions (FI’s), the companies have built technology offers an end-to-end solution to currency management, authorisation, clearing, settlement and dispute management.
Currently, Worldline is focusing on bringing this solution to their core markets in France and Belgium, with approximately 60,000 and 8,000 ATMs respectively.
Dalgaard says: “Our first priority is the core markets of Worldline where we today have, essentially, low penetration of DCC on offer at ATMs. You have some specialist players who may offer this, in an airport or something similar, but none of the big Belgian or French banks are offering DCC at ATMs in popular locations, such as tourist or business destinations.
“This is really the first focus, but the partnership is European-wide so we’re already looking at the next countries, prioritising them on the current stage of their DCC offerings on the ATM front.”
Dalgaard believes that this new offering is of substantial benefit to the consumer in comparison to other forms of foreign exchange. He says: “The value propostion is obviously choice and disclosure of the exchange rate if he or she is withdrawing cash in euros and is a foreign cardholder.
“The cardholder can accept the offered exchange rate and hence the transaction will go through the networks and to his issuing bank in the currency of his card. He locks the exchange rate and he knows what he will be charged at the end of the month on his bill. The charge he will pay is not on top of what he is already paying, it’s essentially substituting the Forex transactions that his issuer will make. The difference is really the choice and the transparency.”
In terms of charges and fees, Dalgaard believes that this method is much more transparent than in other Forex services.
He adds: “The business model for the acquiring bank is obviously that they will apply a mark up on the exchange rate. FEXCO, being the Forex provider, will fix an exchange rate and add a mark up to the rate and it’s fully transparent. It can be customised all the way down to the individual ATM, but normally it will depend on the market, the volume and so on. It’s preferable to an unknown exchange rate, applied in 10-15 days time, with an unknown mark up.”
He concludes: “The banks should recognise this as a value-added service which many of them are not offering today. We know that a lot of the backbones of ATM systems are not multi-currency. That’s where we come into the picture; to enable the banks a short time to get to market and a cost-effective solution.
“We limit on the bank’s legacy system and offer them this value-added service to their cardholders at an ATM as effectively as possible. It’s a cheaper way for the banks to do it rather than building everything in house.”