Currency exchange rate fluctuations are like the weather: we cannot control them but can manage their effect and protect ourselves from the risks they might pose.
At Praxis, we have developed a way to reliably mitigate the risks and negative consequences of FX rate fluctuations for merchants AND their clients.
While working with multiple currencies, one cannot avoid FX rate volatility. While this is especially true with some notoriously volatile pairs, rate fluctuations happen with any currency, causing difficulties and confusion for merchants and their clients alike.
This is especially tricky when it comes to withdrawals. As a customer submits a withdrawal request, the FX rate applied to their trading account's base currency may change before the transaction is approved by the merchant. This poses challenges for both the customer and the merchant.
The customer needs visibility into the FX rate applied to their base currency, as well as the corresponding amounts in the base currency and the processing currency. However, due to market volatility, the FX rate can change significantly, resulting in potential discrepancies between the requested amount and the approved amount. This lack of transparency can lead to confusion and dissatisfaction by customers.
When it comes to merchants, they need to accurately assess the amount in the customer's account base currency at the time of the withdrawal request. Currently, they may not have access to the converted amount based on the prevailing FX rate, making it difficult for them to make informed decisions about approving the transaction.
To overcome these challenges, Praxis has been working on a solution that locks the FX rate the moment the withdrawal request is submitted. This way, both the customer and the merchant can have a clear understanding of the FX rate and the corresponding amounts throughout the withdrawal process. By ensuring transparency and stability in FX rate conversions, we empower merchants with better control over the transaction process, helping them enhance the overall customer experience.
With our recent release, merchants can mitigate the risks associated with FX rate fluctuations in 2 ways:
- Lock FX Rate - locking FX rate from the moment of the withdrawal request done by the end customer and applied back again at the moment of managing the withdrawal request.
- Apply FX Rate on Confirmation - the rate is recalculated at the moment of the confirmation of the withdrawal request and might be different from the rate at the moment of the withdrawal request. The recalculation will happen on the processing amount and the base amount will not be changed.
This latest feature by Praxis enables merchants to exercise better control over FX rate fluctuations, with the flexibility to choose the approach that better suits their business needs. Contact us to explore how this feature can help you mitigate the risks of FX rate fluctuations and improve the withdrawal process in your company.