Multi-Currency Merchant Account: Attract International Customers
If you run a business that accepts a significant number of MoTo or e-commerce orders, you likely already have a merchant account to process those credit and debit transactions. However, a standard merchant account is only useful for transactions using your home country’s currency; if you want to open your business up to international customers in a way that will make things simple both for the shopper and for you, a multi-currency merchant account is your solution.
A multi-currency merchant account facilitates international sales in a number of ways. When a customer in another country browses your website, the prices of your merchandise will be displayed in the customer’s home currency, making it easy for them to understand exactly how much the item costs, rather than forcing them to hunt down an exchange rate before making their decision. When the customer uses their credit card to make their purchase, the payment is accepted in their home currency and their credit card statement holds no unpleasant surprises for them due to fluctuating exchange rates, reducing the likelihood that they will issue a chargeback, and increasing the likelihood that they will become a repeat customer.
Your merchant account will convert the customer’s payment to your own domestic currency before depositing the funds into your checking account, calculated with an exchange rate that is updated daily and which you can easily view through your multi-currency merchant account provider’s website. The exchange rate is guaranteed for 24 hours, so as long as you settle each transaction within 24 hours of authorization, you know exactly how much each sale will earn. You have two choices for setting prices in foreign currencies: the “Controlled” multi-currency feature allows you to fix a set price in the foreign currency, so that international customers will always see the same price on your website, and the payment you receive in US dollars will fluctuate with the varying exchange rate; the “Variable” multi-currency feature enables you to fix a price in US dollars, and the displayed price on your website will update based on daily changes to the foreign exchange rates (the former option is usually preferred).
Several common foreign currencies are available for multi-currency processing, including the Canadian Dollar, the Australian Dollar, the UK Pound Sterling, the Japanese Yen, and the Euro. If other currencies are important to your business, you should inform your multi-currency merchant account provider, as new currencies are added based on merchant demand. Allowing international customers to shop using their own currency makes your product much more accessible to them, greatly reducing the likelihood that they will merely browse and move on. It also increases customer loyalty, because your international customers know that their shopping experience with you will be easy, accessible, and predictable.
Using a multi-currency merchant account allows you to process transactions in several different foreign currencies without needing to deal with offshore banking or establishing a merchant account overseas. If you already have a payment gateway, you can use it to receive your multi-currency payment transactions only if it is certified; otherwise, you can choose to maintain your current gateway for domestic transactions and acquire a different, certified gateway for your multi-currency transactions. This will not affect your domestic USD transactions in any way, and your multi-currency transactions will not experience any processing delays relative to your domestic transactions. It is important to note that, in the event of chargebacks and refunds, the chargeback will be processed in the foreign currency. The amount of the refund in US dollars will differ from the amount of the original sale, due to fluctuations in the exchange rate. Investing in verification measures and fraud scrubbing software is recommended for international sellers, as AVS (Address Verification System) typically does not work on transactions outside of the US.
If you would like to discuss a multi-currency merchant account with an account manager at Durango, please complete our short contact form at the following link!