How does foreign exchange work?

Oyster will manage payments and foreign exchange rates so you don't have to.

Below are three common scenarios for payment currencies and foreign exchange (also referred to as f/x).

Customer payment currency

Your payment currency to Oyster is always in USD, and you are able to set up a direct debit from your US bank account.

Oyster is able to accept payment from customers in USD, Euro, or GBP.

Contractor invoice currency

The contractor invoice currency is the payment terms written into your legal agreement with the contractor. This is likely to be in either USD or the local currency.

If your contractor wants to receive local currency, and your agreement is in USD, then your contractor is taking the foreign exchange risk; therefore, their payment will vary based on the exchange rate. (See scenario #2 below.)

If your agreement is in local currency, then you are taking the foreign exchange risk. The amount you have to pay each month will vary based on the exchange rate. (See scenario #3 below.)

Contractor payment currency

The payment currency is the ultimate currency that the contractor wants to receive funds in. If the contractor has a USD account, they can receive funds in USD. If not, they can receive funds in the local currency. Some contractors prefer to receive funds in a major currency (USD, Euro, GBP).

Example: Foreign exchange rate calculations

In this example, you are a US company hiring a contractor in Brazil.

Scenario

Customer payment currency

Contractor invoice currency

Contractor payment currency

1

USD

USD

USD

2

USD

USD

Brazilian Real

3

USD

Brazilian Real

Brazilian Real

Scenario 1: No foreign exchange is required, Oyster does not charge a fee for receiving or sending payment.

Scenario 2: Oyster will convert USD into local currency at a competitive exchange rate. The exchange rate used will be stated in the invoice.

Scenario 3: Since the agreement is in local currency, the payment amount in local currency is fixed. Your invoice each month will fluctuate due to foreign exchange. Oyster will convert the local currency into a USD amount for each invoice at a competitive exchange rate. The exchange rate used will be stated in the invoice.

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