We strive to ensure that the exchange rate used is as close as possible to the mid-market rate (the rate you'll see when you check Google). However, exchange rates are usually affected by factors that are out of our control.
Why doesn't Plane use the mid-market rate?
The mid-market rate is the mid-point or average between the buy and sell rate; hence, it's not really representative of how much it costs to buy a particular currency. In countries with a lower volume of conversions or higher volatility, this buy-sell (or bid-ask) spread is higher. You can end up in situations like this:
Currency 1 has the following rates:
Buy/Bid: 1.4
Sell/Ask: 1.6
Mid: 1.5
Currency 2 has the following rates:
Buy/Bid: 1
Sell/Ask: 2
Mid: 1.5
Although the mid-market rate is the same, 1.5, buying Currency 1 gives you a much better rate than Currency 2.
It's impossible to send payments at the mid-market rate, as it is merely the rate banks use as an average to settle transfers between themselves. Consumers typically cannot buy currency at this rate.
How does currency conversion work?
For supported currencies, we convert the funds to whatever currency the contractor's bank account is in. We always try to have the exchange rate as close as possible to mid-market (the one you see on Google), so contractors get a better rate than if their bank converted it for them.
Payments are not converted immediately after being scheduled because they're not ready to be processed at this point. We need to wait until the charge is completed on our end in order to share the actual rate.
The conversion is usually done when processing the payment. You can always see the approximate rates after a payment is scheduled, but keep in mind that the amount you see on the platform in the Scheduled and Processing stages is just an estimate. Once the payment is Completed, we'll update the actual amount on the platform to reflect the exchange rate used within 24 hours.
An admin may see a different amount in local currency than what the contractor received because the actual amount is not updated on their end. Our Product Team is working on resolving this in the near future.
For some countries, foreign exchange taxes may be charged. Check out this article for more information about these taxes.
In some cases, there might be a bank fee if the payment was sent as an international transfer. Since this fee is not from Plane or our provider, it will be charged after the conversion is done. It doesn't affect the rate used, but it does affect the amount you receive.
🔗 Related Articles
Questions? Please don't hesitate to reach out to us at support@plane.com or use the live chat option at work.plane.com