Glossary

FX markup

FX markup is the gap between the rate a provider uses to convert currency and the market rate — a hidden part of the payment cost.

If the customer pays in one currency and the merchant is paid out in another, the provider converts the amount at its own rate. The markup is usually stated as a percentage over the market or reference rate.

It is easy to miss: the contract shows a single per-transaction rate, while conversion takes another slice of the amount. For example, with a 2% markup you lose another 20 dollars on every 1,000 dollars of volume on top of the fee.

When comparing offers, count the full cost: the rate, the fixed fee, the FX markup and the cost of payouts in the settlement currency. Sometimes it is cheaper to accept and receive funds in the same currency, if the provider supports it.

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Related terms

MDR (merchant discount rate)MDR (Merchant Discount Rate) is the percentage of each payment that a merchant pays the acquirer or provide…SettlementSettlement is the transfer of funds for accepted payments to the merchant, minus fees, reserve and refunds.InterchangeInterchange is the fee the acquirer pays the card-issuing bank for every transaction.

Payments glossary →

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