Currency-based routing
Currency-based routing allows merchants to map transactions to acquirer partners capable of processing and settling in the exact presentment currency. Finance teams can eliminate forced foreign exchange markups and preserve margin across global sales volumes.
- Category
- Routing
- Capabilities
- 10
- Available on
- All plans
Cardflo enables granular control over payment routing based on multiple currency parameters. Presentment currency, settlement currency, supported acquirers, and real-time foreign exchange rates define the routing logic, ensuring transactions are directed to the most appropriate partners for processing.
Merchants define the specific currency conditions that trigger these routing decisions. These conditions can be combined with other criteria, such as card scheme or issuing country, to build sophisticated routing chains that maximise acceptance and minimise processing costs.
Currency-based routing allows transactions to be directed to specific acquirer partners based on the currency of the payment. This approach optimises settlement processes across diverse MIDs and effectively minimises foreign exchange costs.
Currency-based routing overview
Currency-based routing rules specify how transactions are directed through the Cardflo gateway based on the currency involved at various stages of the payment flow. This includes the currency in which the cardholder is presented the price (presentment currency) and the currency in which the acquirer partner settles funds to the merchant (settlement currency).
Cardflo maps these currencies to available acquirer capabilities.
Merchants configure distinct routing rules for each presentment currency. For instance, a transaction in Australian Dollars (AUD) might be routed differently depending on whether it needs to be settled in AUD, United States Dollars (USD), or Euros (EUR).
The system identifies acquirers that can process the presentment currency and settle in the desired settlement currency. Some acquirers support a wide range of both, others are more specialised.
Foreign exchange (FX) conversion points are critical in multi-currency transactions. Cardflo allows configuration of where FX conversion occurs: at the point of sale (Dynamic Currency Conversion, DCC), within the Cardflo orchestration layer, or by the acquiring bank.
This choice impacts the exchange rate applied and the parties involved in the conversion, which may influence routing decisions.
How currency-based routing works
Presentment currency identification
The Cardflo platform first identifies the currency in which the customer is presented with the transaction amount. This is typically passed in the authorisation request. The system then queries its internal database for routing rules associated with this specific presentment currency, for example, JPY or CAD. This initial step dictates the first layer of routing logic.
Settlement currency matching
Cardflo then evaluates the merchant's desired settlement currency for the transaction. The system matches the identified presentment currency and the specified settlement currency against the known capabilities of all integrated acquirer partners. Only acquirers capable of handling both currencies for a given transaction are considered for the next routing stage, filtering unsuitable partners.
FX conversion point determination
If the presentment currency differs from the settlement currency, Cardflo checks the configured FX conversion point. This could be at the issuer, at the acquirer, or within Cardflo prior to authorisation. The choice affects which acquirers are eligible, particularly those that support specific DCC scenarios or those with preferred FX rates, influencing routing priority.
Rule application and transaction routing
Finally, Cardflo applies the configured currency-based routing rules, which may include weighting, cascading, or conditional logic. The transaction is then directed to the most appropriate acquirer based on the presentment currency, settlement currency, FX conversion point, and any other combined conditions, such as the card brand.
Why currency-based routing matters
Precisely control transaction currency processing
Merchants can dictate exactly how and where multi-currency transactions are handled. This goes beyond simple presentment, allowing granular control over the settlement currency and the exact point in the transaction flow where currency conversion occurs. This level of configuration is instrumental for businesses operating in multiple geographic markets with diverse payment needs and operational banking requirements, allowing for tailored handling of each currency pair.
Optimise acquirer relationships for currency support
Different acquirers have varying capabilities regarding the currencies they can process and settle. For instance, some may specialise in Asian currencies, while others focus on European ones. Currency-based routing allows merchants to direct specific currency transactions to the acquirer partners best equipped to handle them. This maximises the effectiveness of each acquirer relationship and ensures appropriate processing.
Currency-based routing use cases
GBP and EUR storefront settlement
Retailers operating separate GBP and EUR storefronts can lose margin when euro sales settle into sterling accounts or sterling sales settle into euro accounts. Cardflo applies currency-based routing so each authorisation reaches an acquirer partner that supports like-for-like settlement into the merchant’s corresponding currency account.
USD wholesale invoice collection
B2B wholesalers accepting card payment for USD-denominated invoices can incur avoidable FX markup when settlement is converted into their base currency before reconciliation. Cardflo routes USD transactions to an acquirer partner able to settle in USD, preserving the invoice currency through processing and simplifying matching against dollar receivables.
Multi-currency hotel folios
Hotels charging folios in GBP, EUR and USD can face conversion costs when room, dining and incidental payments settle through a single base-currency arrangement. Cardflo selects among compatible acquirer partners by transaction currency, directing each payment towards like-for-like settlement while keeping refunds aligned with the original folio denomination.
Currency account treasury allocation
Finance teams receiving card revenue across several currencies need settlement directed into matching GBP, EUR or USD accounts rather than converted into one treasury base currency. Cardflo maps transaction denominations to eligible acquirer partner capabilities and settlement accounts, helping preserve native-currency balances for supplier payments, refunds and planned FX execution.
Currency-based routing by the numbers
Typical savings are achieved by converting international transactions into domestic ones. They depend on the region and the specific scheme fee structures involved.
An industry-typical range for the increase in successful authorisations when transactions are localised. This reduces bank-level fraud declines for cross-border payments.
The estimated reduction in loss during currency conversion. This occurs when bypassing standard issuer or processor conversion rates in favour of local settlement.
Methodology: these figures are illustrative ranges drawn from published industry data and observed merchant cohorts, not guarantees. Actual results depend on your risk profile, card mix, geography and acquiring setup, and are confirmed only in your own pricing and approval terms.
Related terms
Talk to our team about a live rollout across our acquirer partners' rails.
What you get with Currency-based routing
- Define routing rules based on the transaction's presentment currency, such as GBP, EUR, or USD.
- Specify acquirer partners capable of settling funds in the merchant's required settlement currency.
- Configure distinct routing paths for transactions requiring Dynamic Currency Conversion (DCC).
- Set the precise point at which foreign exchange conversion should occur in the payment flow.
- Combine currency conditions with issuer country codes (e.g., ISO 3166-1 alpha-2) for precise routing.
- Prioritise acquirers based on their stated support for specific presentment and settlement currency pairs.
- Utilise 3-digit ISO 4217 currency codes to identify all relevant transaction currencies.
- Establish fall-back routing for currency pairs not supported by primary acquirer connections.
- Monitor settlement reports to verify successful currency processing through chosen routes.
- Review and adjust currency-based rules periodically to adapt to changing acquirer capabilities.
A short scoping call, then a written plan for your MIDs.
Questions about Currency-based routing
How does currency-based routing differ from dynamic currency conversion (DCC)?
Dynamic currency conversion is a service offered at the point of sale where a customer chooses to pay in their home currency at a rate determined by the acquirer, often including a high markup. Currency-based routing is a back-end merchant strategy.
It directs a transaction in its original currency to an acquirer that can process it locally. While DCC focuses on the consumer's choice, currency-based routing focuses on the merchant's cost structure and technical path to improve settlement efficiency.
Will I need multiple Merchant Identification Numbers (MIDs) to use this?
Yes, typically this strategy requires the merchant to maintain MIDs with different acquirers or different regional branches of the same acquirer. Each MID is configured to handle specific currencies.
The routing engine then programmeably determines which MID to use for each request. Without multiple MIDs, the transaction would default to a single path, negating the benefits of regional localisation and potentially increasing cross-border fees.
Which currencies are typically prioritised for routing logic?
Most merchants prioritise major settlement currencies such as USD, EUR, GBP, and JPY due to the high volume of transactions and the availability of local acquiring options.
However, routing can be applied to any currency where the volume justifies the cost of maintaining a local acquiring relationship. Emerging market currencies are also common targets for routing to avoid the significant FX spreads common in those regions.
How does this impact the 3D Secure (3DS) authentication process?
Currency-based routing can positively influence the 3DS process. By routing a transaction to a local acquirer, the authentication request appears more legitimate to the issuing bank.
Issuers often apply stricter SCA (Strong Customer Authentication) challenges or fraud filters to international transactions. Localising the flow via currency routing can reduce the friction encountered during the 3DS step, leading to higher completion rates for challenged transactions.
Can I route transactions based on both currency and card brand?
Yes, most sophisticated routing engines allow for multi-factor rules.
You can configure the system to route a transaction to Acquirer A if the currency is EUR and the card brand is Visa, but to Acquirer B if the currency is EUR and the brand is American Express.
This allows merchants to further optimise for specific scheme fees or brand-specific performance metrics across different regions.
What is the role of a Payment Service Provider (PSP) in this setup?
A PSP or orchestration layer provides the technical infrastructure to manage these rules. They must be able to communicate with multiple acquirers and possess the logic to parse transaction data in real-time.
The PSP acts as the switchboard, ensuring the transaction is formatted correctly for the destination acquirer's specific technical requirements while maintaining a single integration point for the merchant.
Does currency-based routing help with PSD2 compliance?
While not a direct compliance tool, it supports the operational requirements of PSD2 in Europe. By routing Euro-denominated transactions through European acquirers, merchants ensure they are operating within the European Economic Area framework.
This can simplify the application of SCA and ensure that the transaction flow respects the regulatory boundaries intended to protect European consumers and merchants.
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