Foreign Exchange Spread

The spread is a gap between two rates, not a fee line

A foreign exchange spread is the distance between the rate you compare against and the rate actually applied when money changes currency. Neither end is a wholesale market price that was necessarily executed. Visa sets its Currency Conversion Rate from the range of rates available — not necessarily executed — in wholesale currency markets, and says it may differ from the one Visa itself receives; where a government mandates a rate, that applies instead.

Source: Visa, “Visa Core Rules and Visa Product and Service Rules” (Glossary, “Currency Conversion Rate” and “Optional Issuer Fee”, edition 18 April 2026; neither Glossary entry carries a region qualifier), accessed 2026-09-04.

The same caution applies to central-bank rates: the ECB publishes euro reference rates for information purposes only and strongly discourages using them for transaction purposes; they are usually updated around 16:00 CET on working days, except on TARGET closing days. Two parties quoting the mid-market rate at different hours quote different numbers, so fix the source and the hour in writing.

Source: European Central Bank, “Euro foreign exchange reference rates” (ECB reference-rate publication schedule and its stated limits on transaction use), accessed 2026-09-04.

Four places one payment can be converted

A single cross-border payment can be converted more than once, each leg with its own rate-setter. Visa states the split: an issuer sets the conversion rate to its cardholder and an acquirer sets the rate to its merchant, as specified in applicable laws and regulations. When VisaNet converts into an acquirer or issuer settlement currency, Visa applies the rate and it is not adjusted. Cardholder-side markup is separate — Visa’s Optional Issuer Fee is a percentage increase the issuing bank may apply to that rate on an international transaction.

Source: Visa, “Visa Core Rules and Visa Product and Service Rules” (Glossary, “Currency Conversion Rate” and “Optional Issuer Fee”, edition 18 April 2026; neither Glossary entry carries a region qualifier), accessed 2026-09-04.

Source: Visa, “Visa Core Rules and Visa Product and Service Rules” (Glossary, “Currency Conversion Rate” and “Optional Issuer Fee”, and §5.9.2.3 “Required Transaction Receipt Content for Specific Transaction Types”, Table 5-34, “Dynamic Currency Conversion Transaction” row, edition 18 April 2026; no region qualifier on either); Stripe, “Supported currencies” (Stripe’s payment-method, presentment and settlement currency model), accessed 2026-09-04.

Stripe frames the same problem as three currencies: the customer’s payment-method currency, the charge’s presentment currency, and the settlement currency its bank account accepts. If the charge currency differs from the settlement currency, Stripe converts it; if it differs from the payment-method currency, the customer’s bank may charge its own foreign exchange fee. That is Stripe’s model — check what your merchant acquirer calls the equivalent legs.

Source: Stripe, “Supported currencies” (Stripe’s payment-method, presentment and settlement currency model), accessed 2026-09-04.

Ask for the base rate and the applied rate separately

A markup you cannot see is a markup you cannot negotiate. Stripe’s FX Quotes API, in public preview, exposes a base rate and an applied exchange rate as distinct parameters, lets a merchant decide whether to pass the FX fee on, and holds a quote for five minutes, one hour or 24 hours. Its Adaptive Pricing product prices on a rate guaranteed for 24 hours. Those are Stripe mechanics, not a market convention.

Source: Stripe, “The FX Quotes API” (Stripe public-preview product behaviour); Stripe, “Adaptive Pricing” (Stripe local-currency presentment product), accessed 2026-09-04.

What a compliant DCC disclosure must contain

Where the shopper is offered their own currency, disclosure is a rule, not a courtesy. Visa requires DCC to be optional, forbids pre-selecting it, requires express cardholder agreement, and bars the merchant from misrepresenting DCC as a Visa service or imposing extra requirements on paying in the local currency. Table 5-34 sets out the receipt content a DCC transaction must carry, as applicable:

Source: Visa, “Visa Core Rules and Visa Product and Service Rules” (§5.8.9.2 “Dynamic Currency Conversion (DCC) – Merchant, ATM, and Branch Requirements”, edition 18 April 2026; the section title carries no region suffix and one listed requirement is specific to the AP Region (Australia)), accessed 2026-09-04.

• the transaction amount, with currency symbols, in the merchant’s, ATM’s or branch’s local currency and in the transaction currency;
• the words “Transaction Currency,” “Transaction Amount,” “Transaction Charged” or “Amount Charged” next to the transaction amount;
• the Currency Conversion Rate;
• any currency conversion commission, fee, markup or margin on the exchange rate over a wholesale or government-mandated rate;
• a statement, easily visible to the cardholder, that they were offered a choice of currencies for payment, including the local currency of the merchant, branch or ATM location, and expressly agree to the transaction;
• a statement that DCC is conducted by the merchant, branch or ATM acquirer.

Source: Visa, “Visa Core Rules and Visa Product and Service Rules” (§5.9.2.3 “Required Transaction Receipt Content for Specific Transaction Types”, Table 5-34, “Dynamic Currency Conversion Transaction” row, edition 18 April 2026; the section title carries no region suffix), accessed 2026-09-04.

Adyen’s point-of-sale documentation lists comparable fields for merchants building their own receipts — exchange rate, source of the rate, markup, both amounts, and a DCC acceptance statement — and says a surcharge and DCC must not be applied to the same transaction. Adyen limits DCC to Visa, Mastercard and Maestro and to specific currencies and countries — confirm your own coverage.

Source: Adyen, “Currency conversion” (Adyen point-of-sale DCC scope, receipt fields and surcharge restriction), accessed 2026-09-04.

What an undisclosed conversion costs

A forced or unagreed conversion is a dispute, not a service complaint. Under Visa’s Dispute Condition 12.3, Incorrect Currency, an issuer may dispute where DCC occurred and the cardholder did not expressly agree, or was refused the choice of paying in the local currency; the reason and the dispute right are both listed for all countries and regions, covering the entire transaction amount. Visa may also audit acquirers and their merchants, exposing the acquirer to a non-refundable assessment of up to USD 10,000, or USD 50,000 depending on the violation, plus the Tier 2 general schedule.

Source: Visa, “Visa Core Rules and Visa Product and Service Rules” (§11.9.2.1–11.9.2.2 “Dispute Condition 12.3: Incorrect Currency”, Tables 11-58 and 11-59, Country/Region “All”; and §12.3.3.1 “Dynamic Currency Conversion (DCC) Non-Compliance Assessments”, which carries a footnote disapplying it in the LAC Region (Chile); edition 18 April 2026), accessed 2026-09-04.

Compare all-in cost, not headline rates

Judge FX as you judge acceptance cost: one number covering every leg. A quote that beats a rival on merchant discount rate can lose on conversion markup, and neither is the same input as interchange. Reconcile the rate and markup recorded at authorization against what lands in settlement, per currency pair. The CPMI’s July 2020 report records faster, cheaper and more transparent cross-border payments as a G20 priority.

Source: BIS Committee on Payments and Market Infrastructures, “Enhancing cross-border payments: building blocks of a global roadmap” (CPMI Papers 193, 13 July 2020; cited only for the G20 cross-border payments objective stated in the final sentence), accessed 2026-09-04.