Papaya Global – Payments & Exchange Rate Policy

11 March, 2024

Paying your global teams in their local currency doesn’t have to be difficult and complicated.  Here we’ll walk through how we make payroll payments worldwide, which currencies we support and how we calculate exchange rates.

How is the FX rate calculated?
The FX rate charged consists of two components: the reference rate and the FX processing fee.
The reference rate is the mid-market spot rate at the time of the transaction. It’s important to note that FX rates can be quite volatile, and the mid-market rate is in a constant state of flux. Consequently, two transactions occurring just a few minutes apart may result in different FX rates being applied.

Why are our FX rates better than other Payment providers?
Many providers are hiding FX cost by using a reference rate that already includes a margin from their bank or from their Payment Service Provider.
At papaya global, we use the mid-market rate as a reference rate.
The mid-market rate is the mid-point between the rate a currency can be bought or sold and may change multiple times during the day.

How can I verify the FX rate charged by Papaya for FX transactions?
The FX rate can be verified for each transaction on the bank statement page or in the transaction file. This rate represents the amount charged by Papaya and is calculated as the reference rate plus the FX processing fee.

When is the FX cost applied?
Papaya Global provides support for over 100 currencies globally, enabling our clients to pay their workers and contractors in their local currencies. FX conversion occurs when the currency in your wallet differs from the currency of the payout.

What is the process for FX conversion?
The FX conversion is calculated and applied at the moment the transaction is made, typically on the day the workers are paid. However, the funding of the wallet occurs a few days prior to this transaction. This funding amount includes the required sum along with a small buffer to accommodate potential FX rate fluctuations.

This process is designed to ensure that the wallet holds sufficient funds to cover worker payments and to account for any potential shifts in FX rates. This approach also minimizes the need for customers to make multiple funding transactions due to insufficient funds.

Papaya updates the funding amounts daily based on the most recent FX rates and employs a smart volatility buffer. This buffer takes into consideration the specific currency pair involved and the time remaining until the transaction is expected to execute.

Any remaining funds in the customer’s wallet are retained and can be utilized for future payments, reducing the need for additional funding in subsequent cycles. 

How is the FX for EOR calculated?
For EOR workforce solution services, our FX rate considers the payroll processing cut-off and invoice date, and includes hedge components that assure the payment amount and payment date. Payment is determined on the date of the salary calculation by our hedging model managed by our internal treasury. With this in place, the client is not affected by further currency fluctuations. This fixed amount is set and will not change on the date of the actual payment.