Settlement

FX (foreign exchange)

Currency conversion applied to a cross-currency transaction, by the merchant, acquirer, or cardholder's bank.

Three flavours: DCC (cardholder converts at checkout via merchant), MCC settlement (acquirer converts at settlement), or cardholder bank conversion (default). DCC is contentious, high transparency requirements under PSD2, but can pay for itself in revenue share.

Related terms

Cross-border transaction

A card transaction where the issuer country differs from the acquirer country, attracting higher interchange and scheme fees.

Settlement

The transfer of funds from the acquirer to the merchant's bank account, net of fees and reserves.

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