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FX and Settlement (Operator Field Manual)

Cross-border fees hide in FX. Settlement timing hides in processor policy. Know what you’re paying and when the money arrives.

Last verified: Dec 2025. FX markups and policies change; confirm with your processor.

What Matters (5 bullets)​

  • “FX markup” is often the biggest silent fee; ask for the spread vs mid-market.
  • Local acquiring beats cross-border for auth and cost when volume justifies it.
  • DCC is usually a bad deal for customers and can increase disputes.
  • Settlement currency and timing drive cash flow; reserves and holds matter more than basis points.
  • Real-time payments (RTP/FedNow) are irrevocable—treat them like cash.

Typical Costs (directional)​

  • Cross-border fee: 0.6–1.0% on top of interchange.
  • FX markup: 50–150 bps over mid-market (ask for the number, not “competitive”).
  • DCC: Customer pays inflated rate; you may see higher dispute risk.

Local vs Cross-Border​

  • Local acquiring: Better auth rates, lower FX/spread; needs local entity/banking.
  • Cross-border: Faster to launch; higher costs and lower auth.
  • Rule of thumb: If a country is >10–15% of volume, explore local acquiring.

RTP/FedNow Irrevocability Warning​

  • Bank push payments can’t be clawed back.
  • High social-engineering risk (BEC, invoice redirection).
  • Use only with trusted counterparties; add out-of-band verification for new bank details.

Multi-Currency Cash Flow Ops​

  • Decide where conversion happens (at capture, at payout, or at bank).
  • Holding balances: good if you spend in that currency; bad if you always convert later.
  • Reconciliation: multi-currency payouts complicate accounting; align settlement currency with ledger.
  • See also: Payout Strategy.

DCC (Dynamic Currency Conversion)​

  • Usually worse rate for the customer; expect complaints and possible disputes.
  • Offer local currency by default; let customer opt in only if they insist.

Ask Your Processor​

  • “What’s our FX spread vs mid-market, in bps?”
  • “Do you charge cross-border and FX markup together?”
  • “Can we settle in local currency? What are the payout timings and fees?”
  • “Can we disable DCC by default?”
  • “Do you support local acquiring in [target countries]?”

Where This Breaks​

  • Ignoring FX until margins shrink.
  • Running all EU volume as US cross-border (auth loss + extra fees).
  • Accepting RTP/FedNow from unknowns (irreversible loss).
  • Multi-currency without accounting alignment.

Next Steps​

Reducing FX costs?

  1. Ask for spread in bps - Not "competitive"
  2. Evaluate local acquiring - If country >10-15% volume
  3. Understand DCC risks - Usually bad for customers

Managing multi-currency cash flow?

  1. Decide conversion timing - At capture, payout, or bank
  2. Align with accounting - Settlement currency = ledger
  3. Review payout strategy - Multi-currency details

Handling RTP/FedNow?

  1. Know irrevocability risk - Can't claw back
  2. Use only with trusted parties - High BEC risk
  3. Verify new bank details - Out-of-band confirmation