"Pay in AUD?" at the terminal: what it means

An overseas terminal or ATM may offer to charge you in Australian dollars instead of the local currency. Compare the full cost of each option: the merchant's AUD conversion, your card's exchange rate and any international transaction fee.

What's actually happening

This is called dynamic currency conversion, or DCC. When you choose AUD, the merchant or ATM operator handles the conversion instead of your card network. Mastercard explains that its own conversion rate generally does not apply when the merchant or ATM converts the transaction.

If you choose the local currency, your card network and issuer handle the conversion under your card's terms. The rate used for billing can differ from the rate visible when you tap, and your issuer may add a fee.

Why the AUD option usually costs more

The ACCC warns that choosing AUD may be more expensive. The merchant's offer can include a conversion margin, and your issuer may still charge an international transaction fee because the payment is processed overseas. There is no universal percentage: check the actual offer and your card's terms.

How to compare before you tap

You usually only get a moment to decide, so it helps to know the shape of the comparison in advance:

• Record the local-currency price and the terminal's AUD offer. Both are needed to compare the same purchase.
• Check whether your card charges a fee on overseas AUD payments. Some issuers do; NAB describes both AUD and foreign-currency international transactions.
• Estimate the local-currency charge. Use a current reference rate, then include your card's known markup and fee. The amount billed may differ because rates can move before processing.
• Compare the two AUD totals. Include any card fee on the terminal's AUD offer as well.

Worked example

Suppose a purchase is USD 100. For illustration only, assume A$1 buys USD 0.70. The reference conversion is A$142.86. With no extra rate markup and a 3% card fee, paying in USD would be about A$147.14. If the terminal offers A$150 and the same card charges 3% on overseas AUD transactions, that option costs A$154.50. In this example, paying in USD saves about A$7.36. These are hypothetical inputs, not current exchange rates or a quote from any card issuer.

The practical rule of thumb

Paying in local currency is often the safer default when you have not compared the offer, but the cheaper choice depends on the two totals and your card's fees. ATM withdrawals may also have fixed withdrawal or cash-advance fees. Check those separately before you decide.

Sources and method

Reviewed 30 October 2026. The payment rules above are based on guidance from the ACCC, Mastercard and NAB. The worked example uses stated hypothetical inputs and the formula on our methodology page; it is not a provider quote.