# Exchange rate

## Overview

2Checkout uses a fully automated exchange rate solution, locking the rate at the moment of purchase for each order, thus eliminating possible fluctuations between anticipated payouts and settlement.

## Exchange rate

2Checkout locks the exchange rate **as soon as transactions reach Complete** **status**. When transactions are not processed in a like-per-like currency, 2Checkout applies a small mark-up covering the conversion costs and remitting in the settlement currency chosen by you.

{% hint style="info" %}
The exchange rate for Purchase Orders is locked upon invoice generation.
{% endhint %}

This applies to all transactions with a different **order currency** from the **payout currency** set on the vendor account.

2Checkout updates the exchange rates daily based on two sources:

* The **European Central Bank** is the primary exchange rate provider
* **XE** (<http://www.xe.com/>) acts as a fallback provider for currencies not available at the Central European Bank

Updated exchange rates automatically apply to next day purchases.

## Refunds

For refunded orders, the exchange rate is calculated when the refund is processed.

## Workflow

### Control Panel

The exchange rate applied to the total payout amount depends on the currency:

* If the Total is displayed in a payout currency, the exchange rate applied to the Total is the sum of each order's exchange rate.
* If the Total is displayed in a non-payout currency, 2Checkout performs a double conversion applying the mark-up only once.

## FAQ

<details>

<summary>Where does 2Checkout get the exchange rates from?</summary>

* The exchange rates are provided by the European Central Bank (with XE serving as a fallback provider) and updated on a daily basis, applying our own Risk mark-up.

</details>

<details>

<summary>What is the 2Checkout Risk mark-up?</summary>

* The mark-up is a risk management criterion, applied to transactions not processed in a like-for-like currency.

</details>

<details>

<summary>Are there any differences depending on the payment method?</summary>

* **Regular transactions**: 2Checkout will lock the exchange rate upon marking the order as **Complete.**
* **Purchase Orders:** 2Checkout will lock the exchange rate upon generating the **invoice** (order status: **Awaiting payment**).
* **Channel Manager**: 2Checkout will lock the exchange rate at the moment of **payment**.

</details>

<details>

<summary>What happens to refunds &#x26; chargebacks?</summary>

* 2Checkout will apply the exchange rate of the day the refund is processed. The same rule will apply to **lost chargeback disputes** resulting in a **refund**.

</details>

<details>

<summary>How can I change my payout currency?</summary>

* You can [change the payout currency](https://verifone.cloud/docs/2checkout/Onboarding/Payouts/) right from your Merchant Control Panel. However, the new currency will come into effect starting with the next payout cycle.

</details>

<details>

<summary>Is there a way to extract exchange rate information programmatically via IPN?</summary>

* Yes. We expose the FX\_RATE, FX\_MARKUP, and PAYOUT\_CURRENCY parameters via IPN. For more details on how to use them, refer to this article: [Instant Payment Notification](https://verifone.cloud/docs/2checkout/API-Integration/Webhooks/06Instant_Payment_Notification_\(IPN\)/).

</details>

<details>

<summary>Can you provide an example as to how exactly is the FX rate calculated?</summary>

The following scenario can help you understand how the FX rate is calculated. Let's assume that:

* Product price = 100EUR
* Your payout currency is set to USD
* Your customer chooses to pay in EUR
* Exchange mark-up (FXM) = 4%
* Commission = 6%

In this case,

**Product Price EUR - Commission EUR = Amount to be paid in EUR**

**€100 - €6 = €94**

To pay in USD, 2Checkout converts the amount to be paid from EUR to USD and adds the FX Mark-up (FXM), as follows:

**EUR to USD = 1.02**

**EUR to USD + FXM = 0.98**

**Amount to be paid in USD w/o FXM = $95.55**

**Amount to be paid in USD w/ FXM = $91.73**

**Commission - w/ FXM = 9.76%**

</details>


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