Multicurrency Settlements
Multicurrency settlement is the ability to settle transactions in one currency, while the payout takes place in another currency – or in the same local currency in which your business operates.
For international webshops and platforms, this means customers can pay in their own currency, while you receive the proceeds in the currency that best suits your business operations. This reduces unnecessary currency conversions, saves on conversion costs, and gives you more control over your cash flow.
How does it work?
An international payment consists of three components:
- The payment currency
The currency in which the customer pays, for example USD, GBP or AUD. - The processing currency
The currency in which the card network (such as Visa or Mastercard) processes the transaction. - The settlement currency
The currency in which the final payout to your business takes place.
These three currencies don't need to be the same. Thanks to multicurrency settlement, they can be set up independently of each other.
Commonly used settlement currencies
| Currency | Possibly | Description | Countries/region |
|---|---|---|---|
| EUR | Yes | Euro | Eurozone and various European regions |
| USD | Yes | American dollar | United States and various international markets |
| GBP | Yes | British pound | United Kingdom |
| AUD | Yes | Australian dollar | Australia |
| CAD | Yes | Canadian dollar | Canada |
| CHF | Yes | Swiss franc | Switzerland and Liechtenstein |
| CZK | Yes | Czech crown | Czech Republic |
| DKK | Yes | Danish Krone | Denmark |
| HUF | Yes | Hungarian forint | Hungary |
| NOK | Yes | Norwegian Krone | Norway |
| NZD | Yes | New Zealand dollar | New Zealand |
| PLN | Yes | Polish zloty | Poland |
| RON | Yes | Romanian leu | Romania |
| SEK | Yes | Swedish krona | Sweden |
| XCG | No | Caribbean guilder | Curaçao and Sint Maarten |
The benefits
Lower exchange rate costs
When you receive income in the same currency in which you pay your suppliers or keep your accounts, you avoid double currency conversions.
Better predictability
Because you are not directly dependent on daily exchange rates, revenue and margins are more predictable.
International growth
Businesses with branches or activities in multiple countries can more easily use local bank accounts and keep income separated per market.
Higher efficiency
Fewer manual currency conversions means less administrative processing and a clearer financial administration.
Examples
European business with American customers
A Dutch SaaS provider sells software in the United States. The customer pays with a Visa card in USD. Thanks to multicurrency settlement, the business also receives the payout in USD to its US dollar account. As a result, revenue doesn't need to be converted directly to euros.
Danish business
A business in Denmark accepts payments from all over Europe. Customers pay in their own currency, while the business has all Visa transactions paid out in DDK.
Caribbean Netherlands
A business on Bonaire accepts Visa payments from tourists from Europe and North America. Although payments originate from different countries, the payout can take place in USD, the local currency of Bonaire.
Which currencies are possible?The available settlement currencies depend on, among other things:
- the card network used;
- the country in which your business is established;
- the available bank account(s);
- the contractual options with the acquirer.
Points to consider
With multicurrency settlement, it's important to take the following into account:
- any costs for currency conversion when revenue is later converted after all;
- local tax and administrative obligations;
- the availability of bank accounts in the desired currency;
- differences in settlement cycles per card network or currency.
Who is multicurrency settlement interesting for?
Multicurrency settlement is particularly suitable for:
- international webshops;
- SaaS and software companies;
- travel organizations;
- marketplaces and platforms;
- businesses with foreign branches;
- companies that generate significant revenue outside the eurozone.
Payments without multicurrency settlement
Even without multicurrency settlement, you can receive payments in all supported currencies. In that case, the transaction is automatically converted during processing to your configured settlement currency.
Depending on the payment method and the processing chain, this currency conversion is carried out by the card network, the issuing bank (issuer), the acquirer, or another financial party within the payment flow. You then receive the payout in your agreed settlement currency, such as EUR.
This allows you to accept payments worldwide without having to maintain a separate settlement account for every currency. Exchange rates and conversion costs may still apply, however, depending on the payment method used and the financial parties involved.
Multicurrency settlement at PAY.
PAY. supports multicurrency settlement for various card networks. Depending on your contract, country of establishment, and available settlement currencies, your payout can take place in a different currency than the payment currency.
Would you like to use multicurrency settlement or find out which currencies are available for your business? Send an email to support@Pay.nl with the currencies you would like to activate.