Handling several currencies.
WHAT A RATE SPREAD IS
The difference between the rate you obtain and the rate you offer.
WHAT IT IS
The primary revenue source in currency conversion.
WHAT TO DISCLOSE
The rate applied, and any separate fee.
WHY
Undisclosed margin is increasingly a regulatory and reputational issue.
WHAT RATE RISK IS
Exposure to rates moving between quoting and settling.
WHAT INCREASES IT
Long settlement periods Holding balances in a currency Quoting rates that remain valid for a period
WHAT MANAGES IT
Short quote validity Hedging, where available Matching inflows and outflows in each currency
WHAT MULTI-CURRENCY PRICING REQUIRES
Deciding whether to price in local currency or convert at checkout.
WHAT LOCAL PRICING PROVIDES
Clarity for the customer, and better conversion.
WHAT IT COSTS
Exposure to rate movement, and repricing effort.
WHAT DYNAMIC CONVERSION AT CHECKOUT IS
Offering the customer payment in their own currency, at your rate.
WHY IT IS CONTENTIOUS
The rate is frequently worse than their own institution's.
WHAT MATTERS LOCALLY
Rate volatility, and availability of foreign currency, both of which affect pricing and settlement directly.
WHAT TO RECORD
The rate applied to every transaction, and its source.
