A funding currency is the currency a payer supplies to initiate a payment, conversion or account transfer. It may differ from the beneficiary's payout currency and from the currency in which the underlying invoice is stated.
Where does the funding currency appear?
- Bank transfer or direct-debit instruction
- Payment-provider balance
- Card or local payment method
- FX quote and conversion order
- International supplier payment
- Intercompany treasury transfer
How does it affect the transaction?
The funding currency determines the amount debited before any conversion. It can affect available rails, cutoff times, fees, supported corridors and the exchange rate applied to the payout currency.
Funding currency vs. settlement currency
The funding currency is supplied by the payer. The settlement or payout currency is delivered to the recipient or destination balance. If they differ, the record should identify the conversion source, rate, timestamp and fees.
What should be confirmed before approval?
Confirm invoice currency, funding amount, payout currency, expected recipient amount, quote expiry, fee treatment and whether the funding account can send that currency without its own conversion.
What belongs in reconciliation?
Link the debited amount and currency to the FX quote, fees, converted amount, payout, value date and recipient confirmation. A correct recipient amount can still reconcile incorrectly if the wrong funding account was charged.
