Where currency conversion happens in a payment
- At the card issuer, when a card is used abroad: the scheme's rate plus the issuer's fee
- At the terminal or checkout, when the merchant offers to charge in the card's currency
- At the acquirer or gateway, when a merchant prices in one currency and is settled in another
- At the sending bank or app, before an international transfer
- Inside a multi-currency account, when the holder moves a balance
The cost has two parts: the rate applied, compared with the mid-market rate, and any separate fee. A margin inside the rate is harder to see than a fee, which is why regulators ask for it to be shown.
What EU law says about conversion charges
Regulation (EU) 2021/1230 requires currency conversion charges on card payments and cash withdrawals to be expressed as a percentage mark-up over the latest euro foreign exchange reference rates of the European Central Bank, disclosed before the payment is initiated. A party offering conversion at a terminal or a cash machine also shows the amount in both currencies and tells the payer that paying in the local currency is possible.
For a credit transfer started online, the payer's provider states the estimated conversion charges and the estimated total in the currency of the payer's account before the payment is initiated.
Why conversion matters to a product
Conversion is revenue and risk at once. A product that quotes a rate and settles later carries the movement in between, so it hedges, converts at once with a liquidity provider, or keeps each quote valid for seconds only.
Where Currency conversion shows up in a platform
Modules that do the work
- FXCurrency conversion with live rates, your margins and the liquidity provider you choose.
- LedgerThe double-entry book of record behind every balance, fee and transfer.
- PayoutsMoney out to bank accounts, cards and wallets, on the rail that fits each payment.
- Card issuingVirtual and physical cards, wallets and controls, on the issuer processor you choose.
Platforms that need it
Guides that go deeper
Where it is written
The laws and standards this page's facts come from.
General information, not legal advice: what applies to you depends on your services and your market.