Settlement currency and FX risk: what to settle in and what to hold

A shop in Spain sells into Turkey in lira, and the sale looks fine on the day. The money reaches the provider a few days later, sits in a balance, and is converted at the end of the month. The lira has moved in the meantime, and the margin on the order is no longer what the pricing sheet said. Nobody made a decision about that. It followed from a setting chosen on the day the provider account was opened.

This article explains how settlement currency differs from the price the customer sees, where FX exposure sits between sale and payout, how to choose settlement currencies, what holding balances involves, and which hedging topics to take to a bank. It is general information, not financial advice, and it recommends no instrument. For payout timing, see settlement times by region. For how to price, see multi-currency pricing and DCC.

What is a settlement currency?

It is the currency in which your provider pays you. Stripe’s documentation separates three currencies: the one attached to the customer’s card or account, the presentment currency in which the charge is made, and the settlement currency accepted by your bank account. Whenever the charge currency differs from your settlement currency, a conversion happens.

Providers offer two broad setups.

• Convert to a default currency. Stripe converts incoming currencies to the default currency of your home country, unless you add others. It says a UK business with GBP and USD accounts receives USD payments without conversion, and every other currency is converted to GBP.
• Settle like for like. Adyen describes this as settlement with no currency conversion by the scheme or by Adyen, available when the payment method also supports that currency for settlement.

Your choice is limited by where the payment is acquired. Adyen says the currency it can settle depends on the country of the acquiring connection. This is one reason settlement currency belongs in a provider conversation, not only in a finance one.

Where does FX exposure sit between sale and payout?

Exposure starts earlier than most teams assume and ends later. The US government’s trade finance guide defines FX exposure as potential loss from foreign currency depreciation when payment is due. For an online merchant, it runs through six stages.

Stage	What is exposed	How long
Price published	A foreign price set from an old rate	Until you reprice
Sale to settlement	Captured funds not yet converted	Your provider’s settlement delay
Balance	Funds held in a foreign currency	Until you convert or spend them
Reserve	Foreign funds held back by a provider	The reserve window
Refund	The original amount, repaid at a new rate	Your refund window
Dispute	The disputed amount, at a new rate	Until the dispute closes

The first stage depends on how you price. Stripe’s documentation sets out the range of options: with static manual prices, the merchant absorbs currency moves; with its Adaptive Pricing, Stripe manages the rate risk and the customer pays a 2% to 4% conversion fee built into the price.

The last two stages catch people out. Stripe says that when a converted payment is disputed or refunded, it refunds the customer’s exact amount and deducts from your balance at the current rate, which can be more or less than you received. Its example: a USD 60 payment converted at 0.88 gives EUR 52.80, and a refund at 0.86 deducts EUR 51.60. The move can go either way.

How much it matters depends on the currency. These are the European Central Bank’s monthly average rates. The ECB publishes its reference rates for information only and advises against using them for transactions, so read these as a measure of movement, not as a rate you could have dealt at.

One euro buys	October 2025	October 2026	Change in that currency’s value against the euro
US dollars	1.1630	1.1202	Up about 3.8%
Brazilian reais	6.2614	5.7430	Up about 9.0%
Turkish lira	48.68	55.42	Down about 12.2%

Three currencies, three directions in a single year. In one month alone, from July to August 2026, the lira’s average value fell by about 3.2% against the euro. If you hold a balance for a month, a move like that can matter as much as your processing fees.

How do you choose settlement currencies?

Work through these questions for each currency above a set share of revenue.

1. Do you have costs in it? Suppliers, staff, tax, marketing or refunds in the same currency are the strongest reason to settle in it.
2. Can the provider settle it, and where? Adyen’s list shows the settlement options by acquiring country. It says BRL, INR, MYR, MXN and AED can be paid out only to a local bank account, without SWIFT. Stripe says payouts in Brazil and India are always automatic and daily.
3. Do you have an account that can receive it? Stripe generally requires the bank account to be in a country where the currency is official, with some exceptions. Adyen says a local payout is the fastest and cheapest option where your bank is in a country using that currency, and otherwise it pays by SWIFT, where your bank may charge incoming fees and take longer.
4. What does each route cost? Compare the provider’s conversion fee with your bank’s, including any margin in the rate. Stripe says acquiring fees are based on the settlement currency, and that some additional settlement currencies carry a fee.
5. Do scheme fees change? Paybyrd’s indicative July 2026 schedule lists 0.10% from both Visa and Mastercard when settlement differs from the merchant-country currency, with further Visa increases announced for April 2027 and April 2028, reaching 0.15%. Confirm with your provider.
6. Are there exchange controls? Stripe notes that money moving to or from countries with foreign exchange control, including Brazil, goes only through authorised channels. Take local advice before planning around funds leaving such a market.
7. Can your finance team handle it? Each extra currency adds bank accounts, reconciliation and reporting. Our article on reconciling payments across PSPs sets out the work involved.

Should you hold a balance or convert straight away?

Holding a balance is a position on a currency, whether or not anybody intended it. Three reasons to hold are sound: you have a known payment to make in that currency, you need a buffer for refunds and disputes, or conversion at the provider costs more than waiting for a cheaper route. Stripe lets you set a minimum balance to cover refunds, disputes and fees, and warns that when a balance goes negative, it debits your bank account.

Holding because the rate may improve is a different activity. The US guide states that the main aim of FX risk management is to limit losses, not to make a profit.

Consider where the money sits too. Stripe says that if you build up a balance in a currency with no linked bank account, a manual payout converts it to your default currency. In the UK, the FCA says that funds held by payment and e-money firms are not directly protected by the Financial Services Compensation Scheme, and that customers can lose money or face delays if a firm fails. Other countries have other rules, so ask each provider how your funds are held.

Worked example: lira sales, three ways

Example figures, for illustration only.

An online shop based in the euro area sells TRY 5,500,000 a month, worth EUR 100,000 at a starting rate of 55. It has TRY 2,000,000 a month in local costs. The lira falls 3% against the euro during the month. Conversion through its provider costs 2%; through its bank it would cost 0.5%.

Approach	Conversion cost	Effect of the rate move	Total cost
Provider converts everything at settlement, spread through the month	EUR 2,000	About EUR 1,500, half the move on average	About EUR 3,500
Settle in lira, hold all month, convert everything at the bank at month end	EUR 500	EUR 3,000	About EUR 3,500
Settle in lira, pay local costs from it, convert the remaining TRY 3,500,000 weekly at the bank	About EUR 320	About EUR 950 on the remainder	About EUR 1,270

The first two rows cost about the same, for opposite reasons: one pays a higher conversion fee and the other carries more rate risk. If the lira had risen, the second row would have looked clever. The third row is cheapest here because less money ever needs converting, and that part holds whichever way the rate moves. It needs a lira account, and it assumes the bank’s cost holds at that size.

What hedging options can you discuss with a bank?

This section describes tools. It does not recommend any of them. The US International Trade Administration’s trade finance guide is a useful plain-language reference, written for exporters, and most of it carries over to online sales.

Tool	What it does	Point to raise
Natural hedge	Spends revenue in the currency it arrives in	Needs real local costs; no contract
Pricing in your own currency	Moves the risk to the customer	The guide warns it can lose sales to competitors who accept local currency
Forward contract	Fixes a rate for a set amount on a future date, from three days to one year out	You must deliver the amount even if sales fall short
Window forward	Allows delivery between two dates	Useful when timing is uncertain
Currency option	Gives the right, but not the duty, to convert at a set rate	You pay a premium; the guide says options cost more than forwards
Provider rate lock	Fixes a rate for a short period at checkout	Short windows only; check availability

The forward’s warning matters more for a merchant than for an exporter with one invoice. Online revenue is a forecast. If sales come in under the amount you agreed, you still have to deliver the currency. So a hedge on expected sales carries a risk of its own, and many teams would ask their bank how much of a forecast it makes sense to cover.

Provider tools are narrower. Stripe’s FX Quotes API, in preview, locks a rate for 5 minutes, 1 hour or 24 hours, for a fee between 0.07% and 0.30% depending on the currency and duration. Stripe says the quote lapses if the rate moves past a 3.5% threshold, and that some non-card methods can take longer than the lock. This covers the gap between showing a price and collecting it, not your balance.

Before speaking to a bank, gather these numbers per currency: monthly revenue, monthly local costs, average days from sale to conversion, refund and dispute rates, and how far your forecast has missed in the past. Ask what the bank offers for your size, what it requires in documents and limits, and how the cost is shown. Ask your accountant how FX gains and losses will be reported and taxed. Hedging is a specialist area, and the right answer depends on your own circumstances.

How does Omno help with settlement currency decisions?

Omno is not a bank, acquirer or merchant of record, so settlement currency, conversion and payout terms sit with each provider you connect, and each provider onboards you separately. Routing rules can use currency, country, amount or card BIN, and PSP eligibility rules decide which providers may receive which payments, so a currency can go to the provider whose terms suit it, where a connected provider offers it. Reports and the transaction trail show what went where. The payment orchestration page explains the model.