Travis Gibson
September 20, 2023

Global Money Movement, Part I: The Basics of Multi-Currency Transactions

In this post, we cover the basics of multi-currency transactions for those looking to begin storing and moving funds across borders.


It’s becoming more and more crucial for companies of all stages to operate globally, and this is especially true of fintech. But what does it mean to operate globally in financial services? What's involved and what are the product considerations when building financial products that span borders?

In our new series: Global Money Movement, we break down common questions and considerations for building and scaling global financial products. 

Today, we’ll cover the basics of multi-currency transactions for those looking to begin storing and moving funds across borders. For now, we'll focus on some of the big considerations and common challenges, and in future posts we’ll explore the nuances of how to do multi-currency accounting, how to navigate global payment systems, and how Proper helps fintechs with the technology you need to build & operate global financial products.

Understanding multi-currency money movement

What is multi-currency money movement?

Most simply, multi-currency transactions exchange one currency to another. This includes properly recognizing and accounting for exchange rates between those two currencies and managing balances across impacted accounts.

Common use cases that involve multi-currency transactions are: 

  • An individual transferring funds to family members in another country
  • A business paying a vendor in another country
  • An employer paying an employee who lives in another country

Why is it complex?

Multi-currency transactions are tricky. To create a seamless customer experience that moves US Dollars to, say, an account in Mexican Pesos, funds travel through several intermediary entities under the hood. A to B for the end customer becomes A to C to D to B for the company enabling the transfer. This path includes multiple banking systems, payment rails and currency exchange services - which means time delays, regulatory nuances, and fluctuating exchange rates. 

At Proper, we’re excited about the opportunities for innovation in cross border banking & payments. And we know that to build elegant global money movement products, you need the right technical infrastructure under the hood, starting with core ledgers and financial reconciliation. 

Ledgers & financial reconciliation considerations

The multi-step nature of international money movement requires that you model funds flows on a double-entry ledger and reconcile each step in the payment’s journey. You’ll need the ability to maintain a source of truth for customer balances and represent “A to B” transactions to your users - while maintaining the ability to track & monitor all the individual transactions that take place on the backend.

This process will involve multiple sub-ledgers and accounts involved in the transaction: for moving money from A to B on the application layer and for the back office funds movements across payment partners, exchange services, and banking partners in each country. 

Stitching together banking and payments providers

The cross-border payment journey starts with traversing the banking system of the host country, where funds are likely to settle anywhere from instantly (unlikely) to t + ∞ (more likely, although slightly shorter than infinity - though it can feel like this to your users!). Once funds are within your ecosystem, you’ll exchange them into the desired currency involving one or multiple currency trading accounts. Depending on your relationships with banking partners in each country you operate within, you'll need to account for payments moving into and out of your bank accounts and manage sweeps of funds across operating accounts in each country. Managing the sequencing & timing differences across these funds flows require flexible ledgering infrastructure and reconciliation services to ensure money is where you expect it to be. 

Managing foreign exchange rates

In addition to moving funds across the banking systems globally, you’ll need to manage the intricacies of foreign exchange. Often, the quote rate (the price of the currency that you want to purchase - can be either a direct or indirect quote) received from a forex trading desk will likely have more decimal places than the standard ISO currency amount. Let’s say you get the direct quote of GBP to USD of 1.1531. To determine the dollar cost of £263.77 you'll multiply 263.77 x 1.1531 = $304.153187. However, you’ll note that we’ve only got space for 2 of those decimals in USD. Rounding will be a requirement here, and knowing how your system is going to round and when changes in exchange rates are recognized is of critical importance for consistency of downstream accounting workflows. 

Proper reporting and accounting

When managing multi-currency transactions on a double-entry ledger, you’ll need to be able to account for changes in exchange rates across your currencies over time. This is crucial for properly balancing your books and accurately reporting profit & loss statements and balance sheets across your company. And, you'll need to perform this accounting across sub-entities (companies that are set up in each country that you operate in).

Additionally, for companies working directly with trading desks at scale, you’ll often have the ability to execute block trades. This just means that as your trading volume grows with a given forex trading desk, you’ll begin to get access to preferential pricing. So your quote of 1.1531 when you were buying $10k of GBP becomes 1.15 at larger volumes. This delta can be captured to help grow your business, but it introduces ledgering and accounting complexity. It’s important to be able to implement the right financial infrastructure to answer questions like: Where did this extra profit come from? How many transactions in my foreign currency did the better pricing tier fund? Was buying a larger block worth the additional risk of holding more of a certain currency? How has my trade been fairing over the past day / week / month?


At the end of the day, multi-currency transactions involve onboarding customer funds in one currency, buying the desired currency, and transferring the new currency to the customer. This transaction journey is not a single seamless funds transfer, but rather several transactions across a distributed ecosystem. And this creates unique ledgering and financial reconciliation complexity. This complexity is both a challenge and opportunity, requiring the right technical infrastructure for managing the process across complex money movements.

In future posts we’ll explore the nuances of how to perform multi-currency accounting, how to navigate global payment systems, and how Proper helps fintechs with the technology you need to build & operate global financial products.

If you’re looking for a partner in your multi-currency product journey, Proper is eager to help. We provide core accounting ledgers and financial reconciliation software for fintechs, purpose built for stitching together complex payments flows. For a demo, please reach out.

Travis Gibson
September 20, 2023

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