Foreign Exchange accounting

The following FX accounting features help banks manage compliance with foreign exchange transactions:

• FX accounting maintains comprehensive audit trails for all the API operations.
• FX accounting protects customer accounts from currency fluctuations.
• FX accounting implements complete double-entry accounting principles.

FX accounting needs a Visa financials subscription through RTSI services.

Enable a configuration to allow Pega Smart Dispute Agentic Automation to handle FX accounting for Visa disputes. The Issuer Subscribed to Visa Financials Rule controls the activation of the Smart Dispute FX module. When the configuration is active, the application can invoke GetDisputeFinancialDetailsOperation to assess fluctuations in the disputed amount arising from changes in currency exchange rates.

The following figure shows the Visa financial service Configuration Set in App Studio:

Pega Smart Dispute Agentic Automation implements a comprehensive FX accounting framework that addresses three key scenarios in Visa dispute processing:

• Dispute response processing with FX gains.
• Declined dispute FX loss processing.
• Multi-Stage dispute resolution FX processing.

Dispute response processing with FX gains

FX accounting manages the scenarios where dispute amounts decrease, which results from FX rate changes. It automatically calculates and processes FX gains. It implements double-entry accounting with proper Receivable and Visa Clearing Account entries.

The following example highlights how the application handles an FX Gain of USD50 because of currency fluctuations.

Consider a business scenario where the Issuer accepts partial liability; the total amount, which includes write-off, customer liability, and pre-arbitration, must equal the outstanding amount, including the FX Gain. The system automatically writes off the FX gain amount to the bank's FX Write-off account and updates the accounting in the financial adjustments ledger of the Visa Dispute Case. The FX Gain is credited to the FX Write-off account from the Suspense account.

The following figure shows the Visa Dispute Case details and Financial adjustments ledger section with transaction adjustments:

Declined dispute FX loss processing

Pega Smart Dispute Agentic Automation manages FX loss scenarios in declined collaboration disputes. It processes the updated amounts affected by FX rate changes and maintains proper accounting entries between Receivable and Visa Clearing Accounts.

For example, an Issuer writes off the dispute amount. The actual transaction amount was USD1000. But when the dispute was raised, the amount dispute amount was USD1100 because of currency fluctuations. The system credits the FX Loss amount to the Suspense account from the FX Write-off account. These adjustments are displayed in the financial adjustments ledger of the Visa Dispute Case.

The following figure shows the Visa Dispute Case details and Financial adjustments ledger section with transaction adjustments:

Multi-Stage dispute resolution FX processing

Pega Smart Dispute Agentic Automation implements FX accounting throughout the dispute lifecycle, including the Pre-arbitration Stage, Arbitration Stage, and Final appeal Stage. The application supports FX accounting in both full and partial amount scenarios. All the adjustments at any Stage are traceable in the Financial adjustments ledger section of the Visa Dispute Case.