Your currency setting is a disclosure decision, and European law has said so since April 2020

We turned on 4 extra settlement currencies in 2024 and I called it a pricing decision. It is not. It is a disclosure decision, and I was wrong in a way that took a European regulation to show me, because the part that changes what customers see is written into law rather than into a processor’s dashboard.

I would split the job differently now. The practical question of how to accept payments in multiple currencies has 2 halves. One is operational: which currencies you price in, which you settle in, and who carries the conversion. The other is what you must tell the buyer before they press pay, and in the European Union that half is set by Regulation (EU) 2019/518 of 19 March 2019, which amended the older cross-border payments regulation.

I went looking for the text after a customer in Vienna sent a screenshot asking why 2 shops showed her the same price differently. Reading it took most of an evening. It is short, and 1 sentence in it does more work than every currency setting we have.

The sentence that decides what the buyer sees

I would print this sentence and tape it to the checkout code. Article 3a says currency conversion charges must be expressed “as a percentage mark-up over the latest available euro foreign exchange reference rates issued by the European Central Bank (ECB)”.

Not as a rate, and not as a spread you can describe in words. As a percentage over a public reference rate that anybody can look up, and the same article says that mark-up “shall be disclosed to the payer prior to the initiation of the payment transaction”.

That is the whole reason the regulation matters to a shop. The moment a conversion charge has to be a single comparable number quoted before payment, the old practice of quoting a friendly looking exchange rate and keeping the margin inside it stops working, and I had been treating our own conversion as invisible plumbing.

Two more paragraphs follow and I had read neither. Paragraph 2 adds a second obligation: those mark-ups must be public “in a comprehensible and easily accessible manner on a broadly available and easily accessible electronic platform”. Paragraph 3 adds that at an ATM or point of sale the payer must be told, before the payment starts, the amount payable in the currency used by the payee and the total in the currency of the payer’s own account. The preamble says both amounts should be “documented on the receipt or on another durable medium”.

The dates, because they are older than most advice about this

I expected this to be recent law. The regulation applies from 15 December 2019. Article 3a paragraphs 1 to 4 and Article 3b apply from 19 April 2020, and paragraphs 5 and 6 of Article 3a from 19 April 2021. None of this is new law, which is the uncomfortable part: it has been in force for years while shops, including ours, kept describing conversion as a rate rather than a mark-up.

The age of the rule changes how I read our own history with it. We added currencies in 2024, 4 years after the disclosure requirement started applying, and at no point did anybody in the chain between the processor dashboard and our checkout template mention that a percentage figure was supposed to appear before the pay button, which tells you that compliance here travels by reading the regulation rather than by buying software.

There is also a review clause. Article 15 required the Commission to report by 19 April 2022 on how providers apply Articles 3a and 3b, covering at least the period from 15 December 2019 to 19 October 2021. That report stayed unread here, so nothing below describes its findings. It is on my list. I am mildly annoyed that it took a customer screenshot to get me this far into a regulation in force since before we opened our second currency.

What a shop actually has to build

Reading the text a second time, I counted 4 things a checkout has to produce, and only 1 of them is a number most shops already have.

First, a mark-up figure, expressed as a percentage over the ECB reference rate for the day, for every currency pair you convert. A place before the pay button where that figure appears. A page on your own site listing the same figures for anyone who looks. And a receipt carrying both the amount in the payee currency and the total in the payer currency.

Our checkout had the first 1 buried in a processor report. The other 3 did not exist at all. I suspect that is the normal state of a shop that grew its currency list one market at a time, because each new currency arrives as a switch in a dashboard rather than as a disclosure requirement.

Here is the arithmetic I now run before turning on a currency. Take the arithmetic on a single order to see how small the number is and how visible it becomes. A basket of 120 euros, an ECB reference rate that gives 4.28 zloty to the euro, and a processor rate of 4.19. The buyer pays 502.80 zloty instead of 513.60, which is a mark-up of 2.1 per cent, and 2.1 per cent is what the regulation wants next to the pay button rather than the rate 4.19. My instinct is that most buyers would accept 2.1 per cent and resent discovering it later, which is roughly the entire design logic of Article 3a.

The exemption that catches people out

The same regulation contains the rule everybody quotes: a payment service provider’s charges for a cross-border payment in euro must be the same as its charges “for corresponding national payments of the same value”. Article 3(1a) extends that to the national currency of a member state that has opted in.

Then Article 3(4) says the quiet part. “Paragraphs 1 and 1a shall not apply to currency conversion charges.” Equal pricing covers the payment. It does not cover the conversion. So a transfer in euro costs what a domestic one costs, while the conversion that makes it possible sits outside that protection entirely, and I had assumed for 2 years that the 2 rules moved together.

Two words the dashboard uses interchangeably

I use these 2 words carefully now, and for 2 years I did not. Presentment currency is what the buyer sees. Settlement currency is what lands in your bank. They are set in different places, they are often different currencies, and our processor calls both of them currency in the same screen, which is how we ended up with 4 of one and 2 of the other without anybody deciding it.

The disclosure rule attaches to the conversion between them. If the 2 match, there is nothing to disclose and nothing to explain. If they differ, somebody converts, and the regulation says the buyer learns the size of that conversion charge before pressing pay rather than after reading a statement.

That is why I would decide the settlement side first. It is a banking decision with a reconciliation cost attached, and the number of accounts you are willing to reconcile every month sets the honest limit on how many currencies you can settle in, which is usually 1 or 2 for a shop with a single finance person and no treasury team at all.

How I would set a shop up now

Settle narrow, disclose wide. Price in the buyer’s currency where you can, settle in as few currencies as your bank tolerates, and treat every conversion as a number you will have to publish rather than a margin you can bury. That order is the opposite of how our own setup grew.

Take a basket of 120 euros sold to a buyer whose card is in Polish zloty. The honest disclosure is not the rate you used. It is the gap between your rate and the ECB reference rate for that day, written as a percentage, shown before the buyer commits. If that number embarrasses you, the problem is the number and not the disclosure.

I would not skip the receipt either. Keep the receipt honest too. Both amounts, the payee currency figure and the payer currency total, belong on whatever the buyer keeps, because that is the line the preamble calls a durable medium and it is the cheapest complaint prevention in the whole stack.

Questions we get

These arrive from shops selling across borders for the first time, usually a week after they turn the currencies on, and 3 of the 5 are versions of the same misunderstanding.

Do the rules on dynamic currency conversion at checkout come from the card networks or from law? Both, and I only read one of them for this piece. The European regulation sets the disclosure: a percentage mark-up over the ECB reference rate, disclosed before the payment starts. The Visa and Mastercard core rules also govern how the choice is offered, and those were outside this piece, so no summary of them appears here.

Which currency should we settle in? As few as your operations can reconcile. Every settlement currency adds a bank account, a reconciliation and a conversion decision, and my guess is that most shops under a few million in turnover are better off with 1 settlement currency and honest disclosure than with 5 and a spreadsheet nobody trusts.

Is the equal charges rule any help with conversion costs? No, and this is the single most misread line in the regulation. Article 3(4) takes currency conversion charges out of the equal charges rule that Articles 3(1) and 3(1a) create.

Where do we publish our mark-ups? Article 3a(2) requires them to be public on a broadly available and easily accessible electronic platform, in a comprehensible and easily accessible manner. In practice that means a page on your own site that a customer can find without asking support.

Does any of this apply outside the European Union? Not from this regulation. It governs payments in the Union, and I cannot tell you what your own regulator requires. What I would say is that the disclosure it demands costs nothing to copy: a percentage next to a price is not a legal artefact, it is the honest version of a number you already know, and a shop outside the Union that shows it anyway loses nothing except the ability to hide 2 or 3 per cent from its own buyers.

A short digression about the word rate

Every conversation about this starts with somebody asking what rate we use, including mine, and the regulation answers a different question on purpose. A rate on its own is unfalsifiable: it looks like a fact and hides a decision. A mark-up over a published reference rate is checkable by anybody with a browser. I still find it strange that it took a regulation to make the checkable version standard. Anyway, back to the setup.

What is not settled here

The card network rules on conversion at the point of sale. I have not read the Visa or Mastercard core rules for this piece, and they matter for how the choice must be presented.

What mark-ups shops and processors actually charge. Nobody publishes a comparison I would trust, and the regulation requires disclosure without requiring a central register, so I do not know of a place to compare them properly.

How the Commission’s review landed. The report was due by 19 April 2022, and I have not found and read it, so this piece stops at the text of the regulation rather than its assessment.