What Are Currency Conversion Fees?
Currency conversion fees are charges for exchanging a customer’s payment from one currency into another. For an e-commerce merchant, the total may include a conversion markup, a cross-border fee, and a separate fee when the processor converts your payout into your bank account’s currency.
These costs reduce the amount you keep from international sales, so include them when setting local prices or comparing payment providers. Exchange rates also change over time; the IRS explains how to convert foreign-currency income into U.S. dollars for tax reporting.
Currency Conversion Fee Formulas
Conversion markup = Revenue subject to conversion × Conversion markup rate
Cross-border fee = Revenue subject to cross-border fees × Cross-border fee rate
Payout conversion fee = Monthly international revenue
× Payout conversion share
× Payout conversion fee rate
Estimated total fees = Conversion markup
+ Cross-border fee
+ Payout conversion fee
Estimated fee per order = Estimated total fees ÷ International order count
The calculator estimates fees from your monthly revenue and the rates you enter. A cross-border fee generally applies when a customer’s card was issued in another country; it is separate from the currency conversion markup. If only some sales qualify for a fee, use an effective rate that reflects the share of transactions affected.
How to Use This Calculator
- Choose the Processor — select your payment provider. Each processor has its own fee structure, and the calculator uses the processor selection alongside your entered rates.
- Enter Monthly Intl Revenue — use the monthly revenue from international transactions involving currency conversion, not your store’s total sales.
- Enter Avg Order Value — provide the average order value for those international orders. The calculator uses it to estimate order volume and fees per order.
- Review Conversion Markup — enter the processor’s percentage markup on the mid-market exchange rate. Check your processor’s current pricing because rates can vary by country and account.
- Review Cross-Border Fee — enter the additional rate that applies when the customer’s card is issued in a different country from your business.
- Enter Payout Conversion details — use Payout Conv Pct for the portion of revenue converted into your payout currency, and Payout Conv Fee for the fee rate charged on that conversion. Leave the conversion share at zero if you receive payouts in the same currency you charge.
- Compare the result with your payout statement — treat the estimate as a planning figure, then check processor reports for the rates and transactions actually charged.
Step-by-Step Example
Suppose a Shopify merchant has $10,000 in monthly international revenue, a $65 average order value, a 1.5% conversion markup, and a 1% cross-border fee. Assume all of this revenue is subject to both rates and no payout conversion fee applies.
| Calculation | Math | Estimated cost |
|---|---|---|
| Conversion markup | $10,000 × 0.015 | $150 |
| Cross-border fee | $10,000 × 0.01 | $100 |
| Payout conversion | $10,000 × 0% × 0% | $0 |
| Estimated total | $150 + $100 + $0 | $250 |
| Estimated order count | $10,000 ÷ $65 | About 154 orders |
| Estimated fees per order | $250 ÷ 153.85 | About $1.63 |
This estimate excludes standard payment-processing fees and assumes every sale qualifies for both currency conversion and the cross-border charge. If some orders are domestic-card transactions or settle in the same currency, use an effective rate or adjust your inputs to avoid overstating costs.
Compare Processor Fees and Payout Costs
Conversion markup and cross-border fees are different charges, and a processor with a lower markup may not have the lowest total cost. The figures below are the indicative rates in this calculator’s processor comparison; verify your account’s current rates before changing providers.
| Processor | Conversion markup | Cross-border fee | Combined estimate when both apply |
|---|---|---|---|
| Shopify Payments | 1.5% | 1% | 2.5% |
| Stripe | 1% | 1.5% | 2.5% |
| PayPal | About 3.5% | 1.5% | About 5% |
These combined estimates do not include standard processing rates or payout conversion. Shopify merchants using a third-party gateway may also pay Shopify’s third-party transaction fee, in addition to the gateway’s fees. Use the Stripe Fee Calculator or PayPal Fee Calculator to compare other payment costs beyond currency conversion.
A local-currency checkout does not automatically eliminate conversion costs. The customer may see prices in their currency while your processor still converts the payment before payout. The SBA’s export guidance recommends accounting for the practical requirements of selling internationally; for an online store, payment and settlement costs belong in that calculation too.
6 Tips to Reduce Currency Conversion Costs
- Test local bank accounts for your main sales currencies. If you receive payouts in the same currency customers pay, you may avoid converting that payout immediately; compare the account’s maintenance and transfer costs first.
- Change the payout conversion share from 100% to 50%. This experiment shows how much of your estimated cost comes from converting only part of your revenue into your settlement currency.
- Compare your processor’s full fee stack, not just its markup. Add standard card processing and any third-party gateway charges before deciding to switch.
- Use Shopify Markets to review local pricing. Test a price adjustment in a target market and check whether the resulting margin still covers conversion, shipping, taxes, and returns.
- Ask your provider for volume pricing when international sales grow. Bring monthly processed volume and payout statements to the discussion; actual transaction data gives the provider a basis for reviewing your rate.
- Check the currency of every payout account. A mismatch between your charge currency and bank currency can create an extra conversion even when the customer-facing transaction is otherwise priced as intended.
Frequently Asked Questions
How much do payment processors charge for currency conversion?
It varies significantly. Shopify Payments charges 1.5% conversion markup plus a 1% cross-border fee; Stripe charges 1% conversion plus 1.5% cross-border; and PayPal charges about 3.5% conversion markup plus 1.5% cross-border. These charges are on top of standard processing rates, and the rates available to you may vary by country or account.
What is the difference between conversion markup and cross-border fee?
Conversion markup is the percentage added to the mid-market exchange rate when the processor converts one currency into another. A cross-border fee is charged when the customer’s card was issued in a different country from your business, regardless of whether the transaction currency is converted, so both fees can apply to one transaction.
Which processor has the lowest currency conversion fees?
For the processor rates compared here, Stripe has the lowest conversion markup at 1%, but its cross-border fee is 1.5%. Shopify Payments charges 1.5% conversion plus 1% cross-border, while PayPal is the most expensive of these options at about 3.5% plus 1.5%; merchants with high international volume can also compare payout services such as Wise or Payoneer.
How can I reduce currency conversion costs?
Receive payouts in the currencies you charge where practical, and compare the cost of local bank accounts with the conversion fees they could prevent. You can also review local pricing in Shopify Markets, compare processors’ full fee schedules, and request custom rates when your international volume supports a negotiation.
Does Shopify charge for currency conversion?
Yes. Shopify Payments charges a 1.5% conversion markup when converting between currencies at checkout, plus a 1% cross-border fee when the customer’s card is issued in a different country. If you use a third-party gateway, Shopify’s 0.5%–2% third-party transaction fee may apply in addition to the gateway’s own conversion charges.
Does showing prices in a customer’s currency prevent conversion fees?
No; displaying a local-currency price and receiving a payout in that currency are separate parts of a payment flow. Check which currency your processor settles and pays out, because conversion can still occur between checkout and deposit.
About This Calculator
The Currency Conversion Fee Calculator was built by Luis Dev Studio for Shopify merchants comparing international payment costs. For help reviewing your store’s payment setup, explore our services or contact us.
Updated by Luis Gonzalez · Feb 25, 2026