Improving rates for larger transactions

This page relates only to third-party FX Providers.

For Source PSPs that provide their own FX, a different process applies. See Payment setup for PSPs who provide their own FX for details.

Tier-based improvements for larger transactions

In Nexus a specific FXP may offer better rates for larger transactions. This works as follows:

• For each specific Source Currency, the FXP may define a number of “tiers” at which better rates apply.

• For each tier, the FXP will define how much the base rate (as provided in the POST /rates/ API) must be improved, in basis points.

• For payments smaller than the lowest tier, the base rate (provided when the FXP submits a rate to the POST /rates/ API) applies.

Note:

• An FXP may choose whether or not to set any tiers for a specific currency, and how many tiers to set.

• Different FXPs may set different tier thresholds for a specific currency.

WORKED EXAMPLE: Tier Improvements

In this example, the Source Currency is Euros. The maximum payment permitted through the TIPS payment system is EUR 100,000. FXP-A may therefore choose to set the following tiers:

FXP Id	SOURCE CURRENCY	TIER THRESHOLD (Minimum transaction size at which the improvement applies)	IMPROVEMENT in basis points (applied to the base rate in the FXP’s quote)
FXP-A	EUR	25,000	50
FXP-A	EUR	50,000	100
FXP-A	EUR	75,000	150

This means that for a payment of 50,000, the rate will be improved by 1%, and so the amount received by the Recipient will be 1% greater than it would have been with the base rate.

If FXP-A quoted the base rate for EUR>SGD at 1.500, then the improvement would be calculated as:

• Improved rate = Base Rate * (1 + ((Improvement in basis points) / 10000)

• = 1.5000 * (1 + (100 / 10000))

• = 1.5000 * (1 + 0.01)

• = 1.5000 * (1.01) = 1.5150

Note that for transactions below the 50,000 threshold, FXP-A’s base rate, as provided in the initial POST /rates/ API call, will apply.

Tiers only need to be set once by the FXP, and will continue to apply for that FXP until the FXP updates or deletes the tiers.