How does an FX markup work?
A provider that converts currency quotes a rate that is worse for the customer or merchant than the reference rate, and the gap is its margin. Stripe’s documentation says it generally applies the mid-market rate plus its published conversion fee, and that its Adaptive Pricing applies a 2% to 4% conversion fee to the rate shown to customers. In the EU, Regulation 2019/518 requires currency conversion charges on card payments to be expressed as a percentage markup over the latest European Central Bank euro reference rates, so they can be compared.
Why does it matter?
FX markups are often the largest cost that does not appear as a fee line. As an illustrative example: a merchant settles 1.5 million euros a month of payments taken in other currencies. A markup of 1.5% costs 22,500 euros a month, more than many merchants pay in visible processing fees, and refunds on those payments are converted again.
How do merchants manage it?
By knowing where conversion happens and who does it. Options include settling in more currencies and converting in bulk, negotiating the conversion margin separately from processing fees, and avoiding double conversion, for example when a provider converts to settle and the merchant’s bank converts again. Settlement reports that show the original amount, the converted amount and the rate make the markup measurable.
Where does Omno use it?
Currency conversion is performed by the PSPs and banks that process and settle payments; Omno does not set exchange rates. Omno keeps one record of every transaction’s amount and currency across connected providers, with reporting and data export that finance teams match against each provider’s settlement reports, where the applied rate appears.