Conversion at receipt occurs when an incoming payment is converted into another currency as it is credited or settled to the recipient. The recipient does not hold the original payment currency; the provider or bank applies its conversion process before making the credited amount available.
How is the credited amount calculated?
For a direct quote, a simple calculation is source amount × applied exchange rate − stated fees. If an illustrative EUR 10,000 receipt converts at 1 EUR = 1.08 USD with a USD 25 fee, the credited amount is EUR 10,000 × 1.08 − USD 25 = USD 10,775.
What should the record show?
- Original amount and currency
- Conversion timestamp and applied rate
- Benchmark or reference rate where available
- FX markup and separate fees
- Converted amount, credited currency and value date
- Customer, invoice and payment reference
Conversion at receipt vs. holding currency
Conversion at receipt immediately changes the incoming currency. A multi-currency or receiving account may allow the business to hold the original currency and decide when or whether to convert, subject to provider terms.
What should a recipient compare?
Compare the final credited amount, not only the displayed fee. A zero-fee receipt can still carry an exchange-rate margin, and intermediary deductions can affect a wire before conversion.
