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How do I calculate foreign currency fee on a payment from USD to AUD?

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GypsyRose503
Contributor
Posted on

Hi, i'm wanting to find out how I calculate what the foreign currency fee will be if someone is paying me with USD and it needs to be converted to AUD in my account?  The amount will be the equivalent of $31.50 AUD total for an item plus postage.  I'd like to add in an extra cost to cover the fees for the transaction but don't know how much they would be?  Thanks.

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How do I calculate foreign currency fee on a payment from USD to AUD?

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sharpiemarker
Esteemed Advisor

@GypsyRose503 

 

4.00% above the base exchange rate (to form the transaction exchange rate)


Plus commercial transaction rate:


3.60% + fixed fee


Fixes fee is 0.30 AUD or 0.30 USD depending on the currency received.

 

What I’d do is invoice buyer in AUD so you receive AUD and pay just the commercial transaction fee and let the buyer deal with the conversion and pay in AUD with their credit card to get a better conversion rate. They can click the exchange rate itself if it’s hyperlinked or the “Currency Conversion Options” link during checkout to select to pay in AUD currency.


Kudos & Solved are greatly appreciated. 🙂

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How do I calculate foreign currency fee on a payment from USD to AUD?

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Go to solution
sharpiemarker
Esteemed Advisor

@GypsyRose503 

 

4.00% above the base exchange rate (to form the transaction exchange rate)


Plus commercial transaction rate:


3.60% + fixed fee


Fixes fee is 0.30 AUD or 0.30 USD depending on the currency received.

 

What I’d do is invoice buyer in AUD so you receive AUD and pay just the commercial transaction fee and let the buyer deal with the conversion and pay in AUD with their credit card to get a better conversion rate. They can click the exchange rate itself if it’s hyperlinked or the “Currency Conversion Options” link during checkout to select to pay in AUD currency.


Kudos & Solved are greatly appreciated. 🙂

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How do I calculate foreign currency fee on a payment from USD to AUD?

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GypsyRose503
Contributor

Thanks @sharpiemarker.  The only bit that I don't quite get is how to calculate the first fee e.g. how do I know what the base exchange rate is to then add 4% onto it?  I will invoice the buyer in AUD as you suggest and get them to cover that fee but would like to know how to work it out anyway.

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