Say a shop charges 6.90 British pounds, but your card uses euros. The price must be turned into euros.
A card machine may offer to do it. That's dynamic currency conversion: a company working with the shop does the math and adds its own extra charge. Shops get a cut.
Refuse, and your card's bank does it instead. In one real purchase, the shop's way cost 8.20 euros; the bank's, 8.04 euros.