Looking to sell to the world?
Here’s everything you need to know about foreign currency payments.
Accepting foreign currency payments may be something that’s been on your mind for a while, or you may have just started to look into it. Whether you’re looking to expand your business globally, or simply want to start by allowing your customers to pay in the currency they choose, processing payments in a foreign currency is something you should consider.
Why is it important?
A big contributor to shopping cart abandonment is shoppers being deterred due to lack of clarity around conversion rates and prices when displayed in a currency that’s not theirs. Offering foreign currency payments shows you’re looking out for your customers, which helps you stand apart in a world where business focus is increasingly centred around the customer. Of course it’s crucial if you want to expand your business internationally.
It also helps your business look more professional.
What do I need to do?
It’s surprisingly easy to set your business up to take multi-currency payments, and you have a good range of options.
We previously wrote a post detailing some of the traditional options: setting up a foreign currency merchant account with your bank, establishing a company in a foreign market or using a third-party vendor. Each of these options pose limitations and drawbacks, you can read the full article here.
The simplest and most cost-effective option is to use a payment provider that processes the transaction for you and automatically handles the currency conversion. With this type of payment system, you don’t need a merchant bank account so there’s no lofty paperwork; it’s super easy and really quick to set up. Most can approve you within a day or two so you’ll be ready to go in no time.
How does it work?
Regardless of whether you have a custom ecommerce solution, you’re using a shopping cart platform (like Shopify, WooCommerce or Magento), or if you have a different set-up altogether, most payment processors will easily integrate with any existing solution you have.
A great payment provider will give you the option to charge your customers in a range of currencies and either, i) convert the money back to you local currency before putting it in your bank account, or ii) allow you to keep the money in the currencies in which your customer paid (this is great if you’d like to have control of when to convert it back to your local currency or if you need to keep the foreign currencies for any outgoings). We find that most businesses leave it to their payment provider to convert the money back into their local currency but, as a business matures, it starts to make sense to keep the money in the foreign currencies.