What is like-for-like settlement? 2026 Malaysia guide

Key takeaways:

• Like-for-like settlement means your payment provider pays you in the same currency your customer paid in; there’s no forced conversion to MYR.

• Most payment gateways in Malaysia default to settling in MYR, and the FX markup on that conversion is often hidden inside the rate.

• Airwallex offers like-for-like settlement in up to 12 currencies for Malaysian businesses, so you can collect, hold, and pay out without forced conversion.

Like-for-like settlement lets businesses receive customer payments in the same currency they were paid in, without automatically converting those funds into MYR.

For Malaysian businesses selling internationally, that difference can help you save on FX fees.

In this guide, we'll explain how like-for-like settlement works, why it matters for Malaysian businesses, and how to choose a payment provider that supports it.

What is like-for-like settlement?

Like-for-like settlement is when your payment provider settles funds to you in the same currency your customer paid in.

For example, if a customer in Sydney pays AUD 200, you receive AUD 200 in your account, with no conversion happening between the payment and the payout.

For domestic transactions paid through FPX or DuitNow, this is straightforward. The customer pays in RM, and you're settled in RM. The complexity starts once a customer pays in a foreign currency, because your provider then decides what currency you actually get paid in.

Three currencies are involved in every cross-border transaction, and understanding the difference between them explains why this matters.

Store currency, transaction currency, and settlement currency

To understand like-for-like settlement, it helps to distinguish between three different currencies involved in a sale:

• Store currency is your business's default operating currency. For most Malaysian businesses, that's MYR.

• Transaction currency is the currency your customer pays in at checkout. For example, if a customer in the US pays in USD, USD is the transaction currency.

• Settlement currency is the currency your payment provider pays out to your business.

The difference between the transaction currency and the settlement currency is what determines whether FX fees are applied.

There are two common settlement models for international payments:

• Like-for-like settlement: Your payment provider settles funds in the same currency your customer paid in, so no conversion takes place before the payout.

• Forced conversion: Your provider automatically converts the payment into another currency, such as MYR, before settling it to your account. That conversion typically includes an FX markup.

Many payment providers advertise multi-currency payment acceptance, meaning customers can pay in different currencies. However, that doesn't necessarily mean those payments are settled in the same currencies.

To know whether a provider supports like-for-like settlement, check the settlement currencies it offers, not just the currencies it accepts at checkout.

The hidden cost of forced currency conversion in Malaysia

Many Malaysian businesses don't realise how much forced currency conversion costs because the fees aren't always shown as a separate line item.

Instead, the cost is built into the exchange rate. And if your business both earns and spends in foreign currencies, you could end up paying that markup twice.

The first conversion: when you receive payment

When a customer pays in a foreign currency but your payment provider settles you in MYR, it converts the funds using its own exchange rate.

That rate is typically higher than the mid-market rate, with the difference representing the FX markup. Because the markup is built into the exchange rate rather than charged as a separate fee, many businesses don't realise they're paying it on every international sale.

The second conversion: when you spend overseas

Imagine a customer in the US pays you in USD. Your payment provider converts those funds into MYR before settling them into your account.

Later, you need to pay a US advertising platform, a software subscription, or an overseas contractor. Because your funds are now in MYR, you have to convert them back into USD (or another foreign currency) to make the payment.

That's a second FX conversion, and a second FX markup. For businesses that regularly receive foreign currencies and spend overseas, these conversion costs can add up quickly.

Example: a business processing RM100,000 a month

Let’s say you own an eCommerce business that processes RM100,000 a month in cross-border sales, mainly from customers paying in USD and SGD.

Here’s what happens with forced conversion:

• Incoming FX conversion (2%): RM2,000/month

• Outgoing FX conversion on RM30,000 of overseas spend (2%): RM600/month

• Total estimated FX cost: RM31,200/year

With like-for-like settlement, much of this cost can be avoided. Instead of converting USD and SGD into MYR when payments are received, you can hold those currencies and use them to pay overseas suppliers, software subscriptions, or advertising costs directly.

3 benefits of like-for-like settlement

Like-for-like settlement does more than reduce FX costs. It gives your business greater control over when currencies are converted, helping you manage international revenue and payments more efficiently.

1. Lower FX costs

This is the most direct benefit. When your payment provider settles funds in the same currency your customer paid in, there's no currency conversion at settlement.

That means you avoid the FX markup that would otherwise be applied when converting those funds into MYR.

2. Greater control over when you convert currencies

With forced conversion, your payment provider decides when foreign currencies are converted into MYR. With like-for-like settlement, you receive the original currency and decide if and when to convert it.

This gives you more flexibility to manage exchange rate movements, rather than being locked into the rate applied at settlement.

3. Pay overseas expenses without converting twice

If your business earns and spends in the same foreign currency, like-for-like settlement lets you use those funds directly.

For example, USD received from US customers can be used to pay US advertising costs, software subscriptions, or suppliers without first converting the funds into MYR. The same applies to other currencies such as SGD and EUR.

By reducing unnecessary currency conversions, businesses can lower FX costs while simplifying cross-border cash management.

Who needs like-for-like settlement in Malaysia?

Like-for-like settlement is most valuable for businesses that earn revenue and make payments in foreign currencies. If you're regularly converting money into MYR only to convert it back into another currency later, you're likely paying more in FX than you need to.

Here are two types of Malaysian businesses that benefit the most:

1. Cross-border eCommerce businesses

If you sell to customers overseas through platforms like Shopify, Shopee, TikTok Shop, or your own website, you're likely accepting payments in foreign currencies.

You may also be paying for digital advertising, software subscriptions, fulfilment, or logistics in those same currencies.

Without like-for-like settlement, your foreign currency revenue is converted into MYR when you receive it, then converted back into USD or SGD when you pay those overseas expenses. That means paying FX conversion costs twice on the same revenue.

2. Businesses paying overseas suppliers

Businesses that import goods or work with international suppliers often need to make regular payments in foreign currencies such as USD, EUR, or CNY.

If you also receive revenue in foreign currencies, like-for-like settlement lets you hold each currency separately and use those balances to pay suppliers directly. Instead of converting every payment into MYR first, you can decide when to convert funds based on your cash flow and currency needs.

How to set up like-for-like settlement

Setting up like-for-like settlement is usually straightforward. The key is making sure your payment provider can settle funds in the currencies your business uses most.

Step 1: Identify the currencies your business receives and spends

Start by reviewing the currencies you use most often.

Look at where your customers are based and which currencies they pay in. Then compare that with the currencies you use to pay suppliers, advertising platforms, software subscriptions, and other overseas business expenses.

This will help you identify the currencies where like-for-like settlement can have the biggest impact.

Step 2: Choose a provider that supports like-for-like settlement

Not all payment providers that accept multiple currencies will settle funds in those same currencies.

When comparing providers, check both:

• the currencies customers can pay in, and

• the currencies your business can be settled in.

The two aren't always the same.

Step 3: Make sure you can hold those currencies

To benefit from like-for-like settlement, your business needs an account that can hold the currencies you're settled in.

For example, if you're settled in USD but only have an MYR account, your bank may automatically convert those funds into MYR when they arrive. Using a multi-currency business account allows you to hold foreign currencies until you're ready to convert them or use them to make overseas payments.

How Airwallex supports like-for-like settlement for Malaysian businesses

Airwallex combines like-for-like settlement with multi-currency accounts, global collections, and international payments in a single platform. That means you can receive, hold, spend, and convert foreign currencies without moving funds between multiple providers.

Here’s what you get with Airwallex:

Like-for-like settlement in up to 12 currencies

Malaysian businesses can receive and hold funds in up to 12 settlement currencies, including USD, SGD and EUR, without automatic conversion into MYR.

One platform for collections, payments and FX

The same foreign currency balances you collect into can also be used to pay overseas suppliers, contractors and business expenses.

When you do need MYR, you can convert your balances from within the same account instead of transferring funds between separate banking and payment providers.

Built for cross-border businesses

Alongside like-for-like settlement, Airwallex provides local collection accounts, international transfers, corporate cards and payment acceptance, allowing businesses to manage their cross-border cash flow from a single platform.

Frequently asked questions (FAQs)

What is the difference between transaction currency and settlement currency?

Transaction currency is what your customer pays in at checkout. Settlement currency is what your provider actually pays out to you. Like-for-like settlement happens when these two match; when they don't, your provider applies an FX markup.

Can I get like-for-like settlement through a Malaysian bank?

Most Malaysian banks don't offer like-for-like settlement the way modern payment providers do. They typically settle foreign currency payments into a single RM account and apply their own conversion markup. A multi-currency business account is usually a better fit if you need to hold foreign currency.

Do I need a local entity in every country to use like-for-like settlement?

No. Some older guides suggest you need to incorporate locally in each market you sell into, but this is outdated. Providers like Airwallex give Malaysia-registered businesses receiving details across multiple currencies, so you can collect foreign currency without opening overseas entities.

How much can like-for-like settlement save my business?

The saving depends on your cross-border volume and the FX markup your provider charges. A Malaysian business processing RM100,000 a month in cross-border sales can lose over RM24,000 a year to a 2% FX markup alone. Airwallex applies a rate close to interbank when you convert to RM, cutting most of that cost.

Is like-for-like settlement the same as multi-currency processing?

No. Multi-currency processing means a provider can accept several currencies at checkout, but it may still convert everything to RM before paying out. Like-for-like settlement means the currency you're paid in matches what your customer used.