How does currency conversion affect what I actually keep?
Currency conversion fees take a markup on top of the mid-market rate plus a presentment-to-payout spread, costing a cross-border order a full margin point or more.
Last updated: June 27, 2026
Currency conversion fees cut what you keep on a cross-border order by charging a markup on top of the mid-market exchange rate, plus a spread between the presentment currency the customer paid in and the payout currency you settle in. On a typical order that markup runs 1.5 to 4 percent, which lands directly on margin as a 1.5 to 4 point hit per sale.
Most merchants treat currency conversion as a background detail the processor handles. The fee is real money, taken on every order that crosses a currency boundary, and it stacks on top of the regular card processing fee rather than replacing it. This post explains the two pieces of FX cost, names the documented charges from Shopify, Stripe, and PayPal, runs the math on a cross-border beanie down to dollars left, and shows you how to find your own per-order number.
What does currency conversion actually cost on an order?
Currency conversion costs you two things on a cross-border order: a conversion fee charged as a percentage markup over the mid-market rate, and an FX spread baked into the rate itself between the presentment currency and your payout currency. Both come out of the same order, and neither shows up as a separate line in your Shopify payout next to the sale.
Start with the vocabulary, because the fee structure only makes sense once the terms are clear.
- The mid-market rate is the real exchange rate, the midpoint between the buy and sell price that banks quote each other. No retail customer or merchant actually transacts at it.
- The presentment currency is the currency the customer sees and pays in, for example a UK shopper paying in pounds.
- The payout currency, sometimes called the settlement currency, is the currency your processor deposits into your bank, for example US dollars.
- The conversion fee is the explicit percentage markup the processor adds on top of the mid-market rate to move money from presentment to payout.
- The FX spread is the gap between the mid-market rate at the moment of the order and the slightly worse rate the processor actually applies.
The conversion fee is the line you can look up in a help center. The FX spread is the quieter cost, because the spread is folded into the rate rather than itemized, so it never appears as a charge you can point to. Together the two make up the all-in FX cost, and together they decide how much of a cross-border sale survives the trip back to your currency.
How do Shopify, Stripe, and PayPal currency conversion fees compare?
Shopify, Stripe, and PayPal all use the same model, a mid-market rate plus a fixed percentage markup, and only the markup size differs: Shopify charges 1.5 percent for US stores and 2 percent for non-US stores, Stripe adds about 1 percent, and PayPal applies a spread of about 3 to 4 percent. The shared model means processor choice alone can triple your FX cost on the same order.
Here is what each one documents.
| Processor | Conversion fee over mid-market | Source | Notes |
|---|---|---|---|
| Shopify Payments (US store) | 1.5% | Shopify Help Center | From April 6, 2026, the fee is calculated on the gross order amount |
| Shopify Payments (non-US store) | 2% | Shopify Help Center | Confirm your region's exact rate |
| Stripe | ~1% for card currency conversion | Stripe | Plus a separate 0.5% to instantly convert a settlement balance |
| PayPal | ~4% on goods and services, ~3% on other conversions | PayPal | Spread applied on top of a base rate |
A few details change the real number. Shopify converts at the rate in effect at the time of the transaction, and as of April 6, 2026 the conversion fee is calculated on the gross order amount per the Shopify Help Center, so a larger order carries a proportionally larger fee. Stripe's roughly 1 percent covers the conversion itself, and if you also convert a settlement balance instantly rather than waiting, Stripe adds about another 0.5 percent, so an instant-convert merchant effectively pays around 1.5 percent. PayPal sits highest, with a currency conversion spread of about 4 percent on goods-and-services payments and payouts per PayPal, which on a thin-margin order is the difference between a profitable sale and a flat one.
The pattern to hold onto is simple. Every processor quotes a mid-market rate and then marks it up. You are never transacting at the rate you see on a finance website, and the markup is the cost.
Worked example: a cross-border knit beanie at the $24 equivalent
Take a US store selling a knit beanie to a UK customer. The customer pays the local-currency equivalent of $24.00 at the mid-market rate, the store presents the price in pounds, and Shopify pays out in US dollars. Walk the order down to dollars left, with the FX cost broken into its two parts.
First the all-in FX cost, computed on its own.
Conversion fee = 1.5% of $24.00 (Shopify US rate) = $0.36
FX spread = 0.5% of $24.00 (modeled mid-market slip) = $0.12
All-in FX cost = $0.36 + $0.12 = $0.48
The 1.5 percent conversion fee is the documented Shopify US charge per the Shopify Help Center. The 0.5 percent spread is a modeled, labeled assumption for the gap between the mid-market rate at order time and the rate actually applied, since that slippage is real but not itemized. Added together, the all-in FX cost is $0.48 on a $24 order, which is exactly 2.0 percent of the order value.
Now the full order economics, with the FX cost as its own line.
| Line | Amount |
|---|---|
| Revenue (price paid, at mid-market $24 equivalent) | $24.00 |
| Cost of goods (knit beanie, landed) | -$6.80 |
| Card processing base fee (2.9% + $0.30) | -$1.00 |
| Cross-border shipping | -$7.10 |
| Duty (cross-border import line) | -$1.45 |
| Dollars left before FX | $7.65 |
| All-in FX cost (conversion fee + spread) | -$0.48 |
| Dollars left after FX | $7.17 |
The math, line by line. Revenue is $24.00. Subtract $6.80 landed COGS, the $1.00 base card fee, $7.10 shipping, and the $1.45 duty line, and $7.65 is left, a margin of 7.65 divided by 24, or 31.9 percent. The 31.9 percent figure already counts the regular processing fee but not the FX charge, because FX is a separate markup layered on top. Subtract the $0.48 all-in FX cost and you land on $7.17, a margin of 7.17 divided by 24, or 29.9 percent.
The FX cost moved margin from 31.9 percent to 29.9 percent, a 2.0 point hit, which matches $0.48 divided by $24. The all-in FX cost as a share of the order is the same number as the margin points it removes. Swap the processor and the line changes. The same beanie run through PayPal at a 4 percent spread carries a $0.96 FX cost, a 4.0 point hit, leaving $6.69 instead of $7.17.
What is the all-in FX cost on this order, in one number?
The all-in FX cost on the $24 beanie is $0.48, the sum of a $0.36 conversion fee and a $0.12 presentment-to-payout spread, which removes a full 2.0 margin points from the order. The number comes straight from the arithmetic above: 1.5 percent of $24 is $0.36, plus a modeled 0.5 percent spread of $0.12, totaling $0.48, and $0.48 divided by the $24 order is 2.0 percent, so the margin hit is 2.0 points.
The same figure scales with processor choice in a way most merchants never price out. On the identical $24 order, the documented conversion charges produce very different costs.
| Processor and rate | FX cost on $24 | Margin points removed |
|---|---|---|
| Stripe, ~1% | $0.24 | 1.0 |
| Shopify US, 1.5% | $0.36 | 1.5 |
| Shopify US 1.5% + 0.5% spread (this example) | $0.48 | 2.0 |
| Shopify non-US, 2% | $0.48 | 2.0 |
| PayPal other, ~3% | $0.72 | 3.0 |
| PayPal goods, ~4% | $0.96 | 4.0 |
Read the spread between the top and bottom rows. Routing the same cross-border beanie through Stripe versus PayPal goods-and-services is the difference between a $0.24 FX cost and a $0.96 FX cost, which is 0.72 of a dollar, or 3 full margin points, on a single $24 order. Across a few thousand cross-border orders a quarter, processor choice on FX alone is a five-figure swing.
How do I find my own currency conversion cost per order?
Find your own currency conversion cost by pulling the FX markup your processor charges, applying it to your average cross-border order value, and dividing by that order value to get the margin-point hit. Use your actual cross-border orders, not your whole catalog, because domestic orders carry no FX cost and will dilute the number.
- Identify your conversion fee rate from your processor's documentation: 1.5 or 2 percent for Shopify Payments, about 1 percent for Stripe, about 3 to 4 percent for PayPal.
- Add any instant-conversion or balance-conversion fee that applies, such as Stripe's roughly 0.5 percent for instant settlement-balance conversion.
- Add an estimate for the presentment-to-payout spread if your rate slips off mid-market, where half a percent is a reasonable starting assumption until you measure it.
- Multiply the total percentage by your average cross-border order value to get the FX cost in dollars per order.
- Divide that dollar cost by the order value, and the result is the margin points FX removes from every cross-border sale.
A measurement note is worth flagging. Refunds do not give the fee back. On a refunded cross-border order the conversion fee and the processing fee are not returned, per Shopify and Stripe, so a returned international order loses the FX cost twice, once on the sale and again with nothing recovered on the refund. The asymmetry on refunds and chargebacks is covered in detail in how FX moves refund and chargeback losses.
What does it cost to ignore currency conversion?
Ignoring currency conversion costs you the full FX markup on every cross-border order, undetected, because the charge is folded into the payout rate instead of itemized next to the sale. On the beanie the cost is $0.48 an order and 2.0 margin points, and on a PayPal-routed order it climbs to $0.96 and 4.0 points.
The danger is that the FX cost lands on orders that are already thin. Cross-border orders carry heavier shipping and a duty line that domestic orders never see, so they start with less margin to give, and the FX markup then takes its cut from the smallest remaining slice. Run a thin scenario on the beanie. Drop the price 10 percent to $21.60 for an international promotion, and shipping to a distant zone rises to $8.40. Revenue is $21.60, COGS holds at $6.80, the base card fee falls to about $0.93, shipping is $8.40, and duty is $1.45, leaving $4.02 before FX. A 2 percent all-in FX cost of $0.43 cuts that to $3.59, and a 4 percent PayPal spread of $0.86 cuts it to $3.16. On a gross-margin view the promoted international order still looks fine, because nothing flags the FX line, so nobody stops it. The wider gap between the revenue you book and the margin you keep is laid out in Shopify revenue versus net margin, and the full per-order cost stack, FX included, is the subject of how to calculate your true net margin.
The Agentis figure: a 2-point FX hit hiding in the payout rate
Run the cross-border beanie and one number frames the problem. The all-in FX cost is $0.48 on a $24 order, computed as a $0.36 conversion fee at Shopify's 1.5 percent US rate plus a $0.12 presentment-to-payout spread at a modeled 0.5 percent, and $0.48 on $24 is exactly 2.0 percent, so the order loses 2.0 margin points. Swap to PayPal's roughly 4 percent goods-and-services spread and the same order loses $0.96 and 4.0 points instead. The markup is not an error, but the documented cost of moving money across a currency boundary, and it lands hardest on the cross-border orders that are already thinnest.
On one clean order the FX hit is a known 2.0 points. Across a live store with multiple presentment currencies, a fluctuating mid-market rate, instant-conversion settings, and a mix of processors, the per-order FX cost shifts with every sale, and the points nobody is watching are where the cross-border margin goes.
Agentis is a real-time profit governance platform for high-volume Shopify Plus and ShopLine merchants. It monitors margin at the order and SKU level and flags or blocks unprofitable activity before it reaches the P&L. Profit governance is the practice of monitoring and enforcing margin rules in real time across every order, SKU, and channel, so unprofitable activity gets caught and corrected as it happens instead of discovered in a month-end report. For FX, that means the cross-border order whose conversion fee and spread push it below your margin floor gets caught on the day it ships, not in a quarter-end reconciliation of a payout report.
Frequently asked questions
What is the difference between presentment currency and payout currency?
Presentment currency is what the customer sees and pays in, such as pounds for a UK shopper. Payout currency, also called settlement currency, is what your processor deposits into your bank, such as US dollars. Currency conversion happens between the two, and the fee plus spread on that conversion is what reduces what you keep.
Do currency conversion fees come back on a refund?
No. On a refunded cross-border order the conversion fee and the processing fee are not returned, per Shopify and Stripe. The customer gets their money back, but you keep neither the FX cost nor the card fee, so a returned international order effectively pays the FX markup with nothing recovered.
Is the mid-market rate what I actually get paid at?
No. The mid-market rate is the real midpoint exchange rate that banks quote each other, and no merchant transacts at it. Every processor applies a markup on top, a conversion fee of 1.5 to 4 percent depending on whether you use Shopify, Stripe, or PayPal, so your effective rate is always slightly worse than the mid-market rate you see quoted.
Which processor has the lowest currency conversion fee?
Of the three compared here, Stripe documents the lowest card currency conversion markup at about 1 percent, followed by Shopify Payments at 1.5 percent for US stores and 2 percent for non-US stores, with PayPal highest at about 3 to 4 percent. On a $24 order the lowest and highest are the difference between a $0.24 and a $0.96 FX cost, so the lowest-fee processor can save 3 margin points per cross-border sale.
How much does currency conversion reduce my margin per order?
Currency conversion reduces margin by the same percentage as its markup, because the FX cost as a share of the order equals the margin points it removes. A 1.5 percent Shopify conversion fee on a $24 order is $0.36 and a 1.5 point hit, and adding a 0.5 percent spread makes it $0.48 and a 2.0 point hit. The exact figure depends on your processor and order value, so compute it on your own average cross-border order.
Next step you can take today: open your last cross-border payout, find your processor's conversion fee rate, multiply it by one international order's value, and divide by that value. The percentage you get is the margin points FX is quietly taking from every order that crosses a currency line.