What is the function of Currency Conversion in card transactions?

The function of Currency Conversion in card transactions primarily involves converting the cardholder's currency into the merchant's currency at the time of purchase. This is essential in international transactions where the cardholder may use a card issued in one currency to make a purchase in a different currency. The conversion process ensures that the transaction occurs smoothly by providing a clear and accurate exchange rate that is applied at the moment of the sale, allowing both parties to understand the exact amount to be charged.

This mechanism is critical for both customer and merchant, as it ensures that the transactional value is correctly processed and settled in the appropriate currency. It simplifies the purchasing process for cardholders traveling abroad or shopping from international merchants, enhancing the overall user experience in card-based transactions.