Multi-currency settlement
Settling group balances when expenses were logged in different currencies, using snapshotted FX rates.
Definition
Multi-currency settlement is the process of resolving a group's balances when expenses have been logged in multiple currencies. The group designates a 'home currency' (typically the group creator's home or the destination's primary currency); all expenses, regardless of which currency they were entered in, get snapshotted to that home currency at the FX rate prevailing on the date of the expense. The snapshot is stored permanently with the expense, so subsequent FX moves don't shift the balance. At settlement time, the smart-settlement algorithm runs against home-currency totals, and the resulting payment plan is shown in home currency by default - but each member can also see the equivalent in their preferred currency for the actual money transfer (e.g., a London-based member sees their €120 owed as £103 for a Wise transfer). The snapshot model is fairer than live re-conversion at settlement: it captures the value of the expense at the time it was incurred, not at the time of payment.
Examples
- Group of 4 in Iceland: home currency EUR, expenses in ISK. Each ISK expense converted at ECB mid-market on its date; settlement plan in EUR; UK member pays in GBP via Wise at trip-end.
- Multi-leg European trip: home currency EUR, expenses in EUR/CZK/HUF/PLN. Each non-EUR expense snapshotted at the day's mid-market rate; settlement is EUR-only.
- FX rates can move 2-5% during a trip. Snapshot model means the recorded amount doesn't change; live model would shift balances. Snapshot is universally preferred.