What do I have to do to support Borderless?

This is a difficult question for us to answer, as it depends on how your specific integration works. The key things that have changed are:

  • A merchant can now collect payments in a currency for which they do not have a payout bank account. For some integrations, this may mean it’s the first time merchants can collect in multiple currencies, which will have a UI impact
  • Payments and payouts might have associated FX information (i.e. an exchange rate) which you may need to use for reconciliation

How do I know if Borderless is enabled?

Call the creditors endpoint for this merchant. If the field fx_payout_currency is set, then borderless is enabled for this merchant.

What currencies can a merchant collect money in?

If borderless is enabled, the merchant can collect money in any supported currency.

How do I know which payments will have FX applied?

There are two options, depending on when you need to know.

  1. If a payment is going to be paid out in a different currency, there will be an fx object on the payment, with information about the exchange rate.
  2. Call the creditors endpoint for this merchant. By default, all payments will be paid out in the fx_payout_currency. However, the merchant may also collect in other currencies. These will be listed in the links section. In the below example, this merchant can collect in GBP and EUR, and all other currencies will be paid out in the fx_payout_currency.
"links": {
      "default_gbp_payout_account": "BA789",
      "default_eur_payout_account": "BA456"
    }

How do I tell the merchant what money they will receive?

Borderless payments are not exchanged into the payout currency until the payout is transferred to the merchant. This means that until the payout has been paid out, we do not know what the exchange rate will be. Instead, we provide an estimated_exchange_rate in the fx block on both payments and payouts. You can display this as a ‘best guess’ until the actual exchange rate is fixed. Note that all items in a single payout will have the same original currency and exchange rate.

How do I reconcile FX payouts?

This very much depends on the implementation. However, if you are an accounting software or you do bank reconciliation, then you may want to think about the following. For these, we will use the example of a merchant with a GBP home currency collecting a EUR payment.

There are two options of how you represent the flow of money:

  1. EUR Payer -> EUR Clearing Account -> GBP payout account
  2. EUR Payer -> GBP Clearing Account -> GBP payout account

Option 1 is more ‘true-to-life’, and can be achieved without having to use an estimated exchange rate, as it’s possible to wait until the exchange rate is confirmed before moving the money from EUR to GBP. However, depending on the software, this may not work with automatic reconciliation - for a payout to auto-reconcile the amount entering the payout account in the software needs to match the real payout amount, which can be hard to achieve if your software imposes a specific exchange rate.

If Option 1 is not achievable, then Option 2 will still work. The only difference is that you will need to use an estimated exchange rate when moving the money into the GBP clearing account. You will then need to calculate a ‘correction’ transaction between the estimated rate and the actual exchange rate that the payout used. This can be calculated as:

(sum of payment_amounts) * estimated exchange rate - (sum of payment amounts) * actual exchange rate.

Note that the fx block of both payments and payouts will have either an estimated_exchange_rate and an exchange_rate, depending on whether the exchange rate has been finalised or not.

How do I reconcile late failures, chargebacks and refunds for FX payments?

The FX rate when the payment is paid out may not be the same as when the late failure, refund or chargeback is processed. In fact, it is very unlikely to be the same. Therefore, when reconciling these transactions you will need to calculate a ‘correction’ transaction to account for the difference in FX rate. This is also true for fees - the fees that are refunded are calculated in the original currency, and then converted as part of the payout. This ‘correction’ is usually called ‘realised FX gains / losses’.