If you sell to customers in other countries, the currency they see at checkout matters. Customers are more comfortable paying in their own currency, and issuers are often more comfortable approving it.
Multi-currency payment processing lets you show prices and take payments in your customers’ currencies, while you get paid in the currencies that suit your business. This guide explains how it works, how it differs from dynamic currency conversion, the costs to watch, and how to set it up.
Key takeaways
- Multi-currency processing means pricing and charging customers in their local currency, then settling to you in one or more currencies of your choice.
- It is different from dynamic currency conversion (DCC), where the customer is offered a conversion at the point of payment. In the EU, DCC conversion charges must be disclosed to the customer.
- The main hidden cost is FX: the margin on each conversion, and the difference when refunds are converted back at a new rate.
- Settling in the currencies you spend avoids converting twice.
- Check which presentment and settlement currencies a provider supports for your business type before you sign.
How multi-currency payments work
A simple example: a UK merchant sells to a customer in the US.
- Pricing: the website shows the price in USD, either converted automatically or set by the merchant.
- Payment: the customer pays in USD. Their card is charged in USD, so they see no foreign transaction surprise from the currency itself.
- Conversion: the payment provider converts the USD amount, or holds it in USD if the merchant has a USD settlement account.
- Settlement: the merchant receives GBP, or USD, or both, depending on the settlement set-up.
The currency the customer pays in is called the presentment currency. The currency you receive is the settlement currency. A good multi-currency set-up lets you choose both.
Multi-currency pricing vs dynamic currency conversion
| Multi-currency pricing | Dynamic currency conversion (DCC) | |
|---|---|---|
| Who sets the price | The merchant shows the price in the customer’s currency | The price is in the merchant’s currency; the customer is offered a conversion at payment |
| Who chooses | The customer picks or is shown their currency | The customer must be given the choice to pay in the merchant’s currency instead |
| Rules | Standard pricing and consumer rules | Card scheme rules, and in the EU the Cross-border Payments Regulation, which requires the conversion charge to be disclosed |
| Typical use | Online shops and subscriptions | Card terminals, hotels, travel |
Under EU Regulation 2019/518, currency conversion charges for card payments must be shown as a percentage mark-up over the latest euro reference rates from the European Central Bank, so customers can compare.
Why offer multiple currencies?
Higher conversion at checkout
Customers can see exactly what they will pay, without working out exchange rates or worrying about fees from their own bank.
Fewer disputes
When the amount on the customer’s statement matches the price they saw, there are fewer “I don’t recognise this amount” complaints. See our guide to chargebacks.
Better approval rates
A currency mismatch is one of the signals issuers use when they decline foreign payments. Charging in the cardholder’s currency, ideally through a local acquirer, removes one of those signals. Read more about improving approval rates.
More trust
Local currency pricing, together with the local payment methods customers expect, makes a foreign shop feel familiar.
While it’s important to work with the right merchant services provider to reduce issues, you also need to be proactive about how you’re managing risk in your day-to-day operations. Merchants should make sure they’re not cutting corners or leading to non-compliance. Keep your policies up to date, monitor your industry’s regulations, etc.
Dennis E.R. Pedersen, CEO and Founder of FastoPayments
The costs to watch
- FX margin: the difference between the mid-market rate and the rate your provider uses. Ask for it in writing.
- Double conversion: converting a customer’s payment into your currency and then back to pay a supplier in the original currency. Holding balances in several currencies avoids this.
- Refund FX: if the rate moves between sale and refund, you may refund more or less than you received. Decide your policy in advance.
- Cross-border fees: card schemes charge extra when the card issuer and your acquirer are in different regions, whatever the currency. Our cross-border payments guide explains these.
How to set up multi-currency processing
1. Choose your presentment currencies
Start with the currencies of your biggest markets. Check that your provider supports them for your business type, because not every currency is available for every high-risk category.
2. Choose your settlement currencies
Settle in the currencies you spend. If your costs are in EUR and USD, settling in both avoids unnecessary conversions.
3. Decide how prices are set
Automatic conversion is quick, but rounded local prices (for example 49 EUR rather than 48.73 EUR) look more natural and stay stable when rates move.
4. Localise the checkout
Show the currency, language and payment methods customers expect, and make sure the amount in the confirmation email matches the amount charged.
5. Check integration and reporting
Your platform or shopping cart must support multi-currency pricing, and your reports should show the presentment amount, the settlement amount and the FX applied for every transaction.
6. Ask about fees up front
Get the FX margin, cross-border fees and any currency-specific charges in writing before you sign.
Frequently asked questions
What is multi-currency payment processing?
It means pricing and charging customers in their own currency and settling the money to the merchant in one or more chosen currencies. The payment provider handles the conversion.
What is the difference between multi-currency pricing and DCC?
With multi-currency pricing, the merchant shows prices in the customer’s currency. With dynamic currency conversion, the price is in the merchant’s currency and the customer is offered a conversion at payment, with the charge disclosed.
Does multi-currency processing reduce chargebacks?
It can help, because the amount on the customer’s statement matches the price they saw, which avoids some confusion. It doesn’t replace good descriptors, clear terms and easy refunds.
What does multi-currency processing cost?
Mainly the FX margin on conversions, plus any cross-border card scheme fees. Ask your provider for its FX margin and fee schedule in writing.
Can I receive payouts in more than one currency?
Many providers offer settlement in several currencies. Check which ones are available for your business type and whether each needs a matching bank account.
Which currencies should I offer?
Start with the currencies of your largest customer markets, then add others as volumes grow. Make sure your provider supports them for your industry.
Next step
Fasto works with adult, subscription, nutraceutical, gaming, dating and hospitality merchants. Tell us which markets and currencies you sell in. Approval typically takes two to three weeks.
