Payment Processor Currency Fees Exposed: How Stripe, PayPal & Braintree Hidden Costs Impact Your Bottom Line

// Currency Exchange API Integration
// Eliminate payment processor currency conversion fees

const CURRENCY_API_URL = 'https://currency-exchange.app/api/v1';
const API_KEY = process.env.CURRENCY_EXCHANGE_API_KEY;
const MERCHANT_BASE_CURRENCY = 'USD'; // Your merchant account currency

// Fetch real-time exchange rates
async function getExchangeRate(fromCurrency, toCurrency) {
  try {
    const response = await fetch(
      `${CURRENCY_API_URL}/convert?from=${fromCurrency}&to=${toCurrency}&amount=1`,
      {
        method: 'GET',
        headers: {
          'accept': 'application/json',
          'x-api-key': API_KEY,
        },
        signal: AbortSignal.timeout(5000), // 5 second timeout
      }
    );

    if (!response.ok) {
      throw new Error(`API error: ${response.status}`);
    }

    const data = await response.json();
    return data.conversion_rate; // Returns: 0.9245 for EUR/USD

  } catch (error) {
    console.error('Currency API error:', error);
    // Fallback to cached rate or display base currency price
    return null;
  }
}

// Display local currency price to customer
async function displayLocalPrice(basePrice, customerCurrency) {
  const exchangeRate = await getExchangeRate(
    MERCHANT_BASE_CURRENCY,
    customerCurrency
  );

  if (exchangeRate) {
    const localPrice = basePrice * exchangeRate;
    return {
      displayPrice: formatCurrency(localPrice, customerCurrency),
      exchangeRateDisplay: `1 ${MERCHANT_BASE_CURRENCY} = ${exchangeRate.toFixed(4)} ${customerCurrency}`,
      chargeAmount: basePrice, // Still charge in base currency
      chargeCurrency: MERCHANT_BASE_CURRENCY,
    };
  }

  // Fallback: show base currency price
  return {
    displayPrice: formatCurrency(basePrice, MERCHANT_BASE_CURRENCY),
    chargeAmount: basePrice,
    chargeCurrency: MERCHANT_BASE_CURRENCY,
  };
}

// Example usage in checkout
async function updateCheckoutPricing() {
  const customerCurrency = detectCustomerCurrency(); // e.g., 'EUR'
  const cartTotal = 100.00; // $100 in base currency

  const pricing = await displayLocalPrice(cartTotal, customerCurrency);

  // Update checkout UI
  document.getElementById('price-display').textContent = pricing.displayPrice;
  document.getElementById('exchange-rate').textContent = pricing.exchangeRateDisplay;
  document.getElementById('charge-disclosure').textContent =
    `You will be charged ${formatCurrency(pricing.chargeAmount, pricing.chargeCurrency)}`;

  // The payment processor receives $100 USD - no currency conversion needed!
  return pricing;
}

import requests
from typing import Optional

class CurrencyFeeOptimizer:
    """
    Eliminate payment processor currency conversion fees
    by pre-converting prices for display.
    """

    API_URL = "https://currency-exchange.app/api/v1"
    API_KEY = "your_api_key_here"
    BASE_CURRENCY = "USD"  # Your merchant account currency

    @staticmethod
    def get_exchange_rate(from_currency: str, to_currency: str) -> Optional[float]:
        """
        Fetch real-time exchange rate with sub-50ms response.
        Returns: None if API call fails (graceful degradation)
        """
        try:
            response = requests.get(
                f"{'{'}CurrencyFeeOptimizer.API_URL{'}'}/convert",
                params={
                    "from": from_currency,
                    "to": to_currency,
                    "amount": 1
                },
                headers={
                    "accept": "application/json",
                    "x-api-key": CurrencyFeeOptimizer.API_KEY,
                },
                timeout=5.0
            )

            response.raise_for_status()
            data = response.json()

            return data.get("conversion_rate")

        except requests.RequestException as e:
            print(f"Currency API error: {'{'}e{'}'}")
            return None

    def calculate_local_pricing(
        self,
        base_price_usd: float,
        customer_currency: str
    ) -> dict:
        """
        Calculate local price display while preserving base currency charge.

        Returns dict with:
        - display_price: Formatted price in customer's currency
        - charge_amount: Amount to charge (always USD)
        - exchange_rate: For disclosure
        """
        exchange_rate = self.get_exchange_rate(
            self.BASE_CURRENCY,
            customer_currency
        )

        if exchange_rate:
            local_price = base_price_usd * exchange_rate

            return {
                "display_price": f"€{'{'}local_price:.2f{'}'}",
                "charge_amount": base_price_usd,
                "charge_currency": self.BASE_CURRENCY,
                "exchange_rate": f"1 {'{'}self.BASE_CURRENCY{'}'} = {'{'}exchange_rate:.4f{'}'} {'{'}customer_currency{'}'}",
                "savings_vs_processor": self.calculate_savings(base_price_usd, exchange_rate)
            }

        # Fallback: display in base currency
        return {
            "display_price": f"{'$'}{'{'}base_price_usd:.2f{'}'}",
            "charge_amount": base_price_usd,
            "charge_currency": self.BASE_CURRENCY,
        }

    @staticmethod
    def calculate_savings(usd_amount: float, exchange_rate: float) -> dict:
        """
        Calculate savings vs using payment processor currency conversion.

        Payment processor fees:
        - Stripe: 1% currency + 1.5% international = 2.5%
        - PayPal: 3.5% average currency + 1.5% international = 5.0%
        """
        stripe_fee_percent = 0.025
        paypal_fee_percent = 0.050

        local_amount = usd_amount * exchange_rate

        return {
            "stripe_savings": local_amount * stripe_fee_percent,
            "paypal_savings": local_amount * paypal_fee_percent,
            "api_cost": 89 / 100000, # Per $1M in transactions (monthly)
        }


# Usage example
optimizer = CurrencyFeeOptimizer()

# Customer in France viewing $100 product
pricing = optimizer.calculate_local_pricing(100.00, "EUR")

print(f"Display price: {'{'}pricing['display_price']{'}'}")  # €92.45
print(f"Charge amount: {'$'}{'{'}pricing['charge_amount']{'}'}")  # $100.00
print(f"Savings vs Stripe: {'$'}{'{'}pricing['savings_vs_processor']['stripe_savings']:.2f{'}'}")
print(f"Savings vs PayPal: {'$'}{'{'}pricing['savings_vs_processor']['paypal_savings']:.2f{'}'}")