Like-for-like settlement for merchants explained

Like-for-like settlements can help your business navigate the challenges of international payment processing

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October 27, 2023
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Like-for-like settlement for merchants explained

Like-for-like settlements can help your business navigate the challenges of international payment processing, including avoiding fees, reducing risk and managing currency fluctuations. However, to enjoy these benefits, it’s crucial to set things up seamlessly.

This article will explain everything you need to know about like-for-like settlements, and how you can use to leverage this system.

What is a like-for-like settlement?

Like-for-like settlement means settling payments in the same currency that was used for the original transaction. So, if a customer buys something in their own local currency, the merchant gets paid in that exact currency. This way, there's no need for currency conversion and any extra fees that come with it.

How to implement like-for-like settlement?

Below, we’ve broken down the simple steps for implementing like-for-like settlements…

  1. Choose a payment service provider (PSP)

If you want lower costs associated with your cross-border payments, it's important to choose a reliable payment processor with a strong global network, such as This first step is really important because it can greatly affect your sales results.

After you've picked the right payment service provider, set up your merchant account and adjust it for like-for-like settlement.

  1. Establish the local entity

Setting up a local legal entity is crucial for following local rules, accessing essential resources, and handling taxes properly. It also boosts your credibility and allows you to tap into local expertise when dealing with different markets, partners, and stakeholders.

We recommend getting advice from experts well-versed in local regulations, which can help you establish the right tax structure. This ensures your business meets requirements for Corporate Tax returns and duties down the line. 

  1. Create your payment infrastructure

Tailoring your payment system depends on your unique requirements. Usually, this means arranging payment gateways, terminals, and related software that work well together, which can help your business securely handle like-for-like settlements.

  1. Guide your staff

Provide your team with clear instructions to become completely familiar with like-for-like settlements – teach them how to handle customer questions and transactions in various currencies smoothly. 

This thorough training not only readies them for important situations, but also boosts their confidence in providing top-notch service. After all, happier customers should bring you closer to success.

  1. Monitor transactions

It's important to keep track of your transactions and settlements for a successful process. Regularly reviewing them can help spot any potential problems that may come up, so stay vigilant in monitoring to prevent any hiccups in the overall operation. 

Advantages of like-for-like settlements

These are the biggest advantages of like-for-like settlements for merchants…

  • Reduced transaction fees – like-for-like settlements mean you don't have to pay extra transaction fees for converting currencies. This saves you money in the long run.
  • Avoids currency fluctuations – when you settle in the same currency, you don't have to worry about losing money because of changing exchange rates. Your finances stay stable.
  • Compliance with local regulations – having transactions in the local currency ensures you're following the rules and regulations of that particular area, which is crucial for legal and financial integrity.
  • Minimized exchange rate risk – by conducting transactions in the original currency, you're protecting yourself from potential losses caused by fluctuations in exchange rates, providing financial stability and predictability.
  • Faster transactions – like-for-like settlements streamline the payment process because there's no need for additional steps or conversions, leading to quicker and more efficient transactions.

How to optimize like-for-like settlements

For smooth like-for-like settlements, you should follow these steps:

  • Keep accurate records – record transaction details like dates, amounts, and customer info, which can help track settlements and solve any problems.
  • Work with local partners – team up with local banks and payment services for better navigation of local payments, ensuring seamless like-for-like settlements.
  • Regularly reconcile – review your transactions and settlements often to catch mistakes early and ensure everything is correct.
  • Stay updated – stay in the loop about industry changes and regulation updates that might impact like-for-like settlements.

Learn more: makes around-the-clock liquidity a reality with stablecoin settlement

Like-for-like settlements and local regulations

When it comes to like-for-like settlements, it's important to be aware of – and comply with – the specific rules and regulations in each country. Each nation has its own policies regarding foreign currency and transactions, so understanding these regulations is crucial for operators to avoid potential legal issues. 

Here are some of the most important considerations…

  • Study local laws – understand the rules in the countries where you operate, covering payment processing, taxes, consumer protections, and data privacy, such as GDPR in Europe.
  • Get necessary licenses – make sure you have all the required licenses or permits to run your business and handle payments in each country.
  • Set Up AML (anti-money laundering) and KYC (know your customer) Measures – put in place strong procedures to prevent fraud, money laundering, and terrorism financing. 

For instance, many jurisdictions have stringent AML and KYC regulations in place to prevent illicit financial activities, which may require your business to verify the identities of customers and maintain detailed transaction records.

  • Keep compliance updated – stay vigilant about any changes in laws and regulations. Regularly update your compliance procedures to make sure you're always following the rules. 

Some countries also have strict controls over the conversion of local currency into foreign currency and vice versa. It's crucial to be aware of these controls to ensure compliance.

Offer like-for-like settlements with

Ready to reap the rewards of like-for-like settlements? Get started quickly and easily with With our international payment processing, you can settle over 20 currencies and save significant revenue by avoiding conversion fees.

That means you can avoid fees, reduce risk and remain compliant – all within one simple tool. Contact our sales team for more information on how like-for-like settlements can help your business.

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October 27, 2023 11:07
October 27, 2023 11:07