Exchange Rate Locking

Exchange rate locking is a service provided by payment processors that guarantees a specific conversion rate for a cryptocurrency payment for a set period. This protects the merchant from price volatility during the time it takes for the transaction to be confirmed on the blockchain.

When a customer initiates a payment, the processor calculates the fiat equivalent based on current market rates and locks that price for the merchant. If the price of the asset drops before the transaction is confirmed, the merchant is still guaranteed the original fiat amount.

This service significantly reduces the merchant's settlement risk and makes accepting crypto more predictable. It is a key feature that bridges the gap between the volatile crypto market and the stable requirements of business accounting.

By shifting the volatility risk from the merchant to the processor, it facilitates wider adoption of digital assets in commerce.