Currency conversion exchanges an amount in one currency for another at an applied rate. In a business payment, conversion may happen before sending, within the route or after funds reach the Recipient’s institution.
The basic calculation
Converted amount = source amount × direct exchange rate
At an illustrative 62.50 PHP per USD, USD 10,000 converts to PHP 625,000 before charges. Reverse the arithmetic when the quote direction is reversed.
| Point | Who applies the rate? | Consequence |
|---|---|---|
| Before initiation | Payer bank or account provider | Payment can be sent in payout currency |
| Within route | Payment provider or partner | Quote and route set the estimate |
| At receiving bank | Recipient institution | Payer may not control the final rate |
| Later | Recipient | Payment and conversion are separate decisions |
Conversion price and transfer price
The applied rate may include an FX markup. Transfer and bank charges can also affect the result. The Recipient amount combines these effects in the payout currency.
Holding the invoice currency can remove one conversion
A business that holds the invoice currency may avoid conversion during a payment, but cross-border routing, account charges and compliance checks can remain.
If an eligible Currency Account already holds the invoice currency, a business may be able to pay without converting at that moment. If conversion is required, compare the Quotable Payments quote using its rate, fees, expiry and expected Recipient amount.
