Thanks to the rise of powerful and affordable ecommerce tools, Australian businesses can easily go global from day one.
[Note: This article is the fifth in a multi-part series by Chris Dahl, providing guidance on setting up an ecommerce business. Read Part 1: Commerce Success Begins With Laying Solid Foundations, Part 2: Commerce partners: who’s right for you?, Part 3: Accepting online payments: the essentials and Part 4: Understanding the risks of selling online.]
Letting your customers pay in the currency they choose could make a world of difference to your brand’s reach and revenue. Whether you’re looking to expand internationally or simply cater for a wider audience from the comfort of home, here’s everything you need to know about accepting foreign currency payments.
Why bother with foreign currency?
Beyond design and web usability factors, a big contributor to shopping cart abandonment involves shoppers feeling deterred by seeing prices displayed in a currency that’s not their own.
The discouragement comes from a lack of clarity of what the total cost will be once a consumer’s bank converts the amount to their currency and adds any associated fees. Displaying prices in a shopper’s local currency removes that uncertainty which will increase the chance of securing a sale.
In addition, offering multiple currency options demonstrates an awareness for the needs of a wider audience. It shows you’re looking out for your customers, wherever they may be. At a time where businesses are increasingly focused on positive experience, this move helps you stand apart from competitors who are less willing to offer this level of customer service.
Don’t let the fees deter you from exploring the option of accepting foreign currency payments. The return and purpose for doing so is far beyond just a monetary concern. The fees can be confusing but a good payment provider can provide you full transparency.
How can I set up multi-currency payments?
Setting up your business to accept multiple currencies is much easier than it used to be. Once upon a time, you would have had to set up a foreign currency merchant account — a special type of merchant account — along with a foreign currency bank account and your own method of converting funds to your Australian dollars. Though this option typically involves considerable paperwork and long processing timeframes, it’s still relevant today for businesses already locked into pre-existing contracts with providers that don’t offer foreign currency services.
For everyone else, the simplest and most cost-effective approach is to find a payment provider who can process the entire transaction for you, automatically handling the currency conversion while acting as your merchant account.
Before 2013, PayPal was the only well-known option available on the market, offering a limited selection of features and technical integrations. Nowadays, you’ll find plenty of providers out there with features and terms to suit the needs of just about every business.
How do foreign currency transactions work?
Whether your ecommerce solution is a custom website, a shopping cart platform, or an invoicing system, you can set up foreign currency payments. Most payment providers will integrate into whatever you already have.
In a typical setup, your customers are first presented with a range of currencies to pick from. Once a payment is processed, (depending on your account setup) your payment provider will either a) convert the money back to your local currency before depositing it into your bank account, or b) keep the money in that currency and deposit it into your foreign currency bank account. The latter can be useful where you need to pay any outgoings in that currency or want greater control over your foreign currency exchange.
Irrespective of your business’s current situation, picking a payment provider that can support your evolving needs and growth can make a notable difference to your operations and your customers’ experience. Allowing your customers to pay in their currency is central to this, so take the time to understand multi-currency payment acceptance.
About the author
By Chris Dahl, Director, Sales & Growth at Pin Payments, an all-in-one payment provider, enabling businesses to accept payments around the world without a traditional gateway or merchant account.