eMerchants must consider accepting multiple currencies
Businesses will have to consider implementing payments solutions which prioritise international considerations, as opposed to only servicing local consumers.
The increased globalisation of eCommerce will continue to be a prevalent trend moving forward. National borders will become more and more irrelevant to the world of online retail as consumers’ comfort level with broadening their purchasing horizons extends online, so much so that it is predicted that $1tn will be spent on cross-border eCommerce by 2020. And this growth won’t only be driven by retail powerhouses such as the likes of Amazon; SMBs are also seeing a marked upturn in their international sales due to the ease and relatively low cost of marketing overseas via online channels such as social media.
The strong improvements in financial inclusion globally will also support the growth of international transactions; as a greater percentage of people gain access to financial products that enable them to purchase online, so grows the pool of potential international customers merchants can target for sales.
Processing international payments
So, what does this all mean for merchants? Essentially, it means that merchants will have to consider implementing payments solutions which prioritise international considerations, as opposed to only servicing local consumers.
Accepting local payments methods is one factor to consider; as the payments landscape becomes increasingly fragmented, consumers are developing regional preferences when it comes to payments methods that need to be reflected in the options that merchants offer. Offering a broader range of payment options is a real differentiator for merchants targeting the global marketplace; merchants that do not consider this to be critical are creating another barrier that prevents them from scaling their business globally.
Confronting FX issues
Offering a greater variety of payment methods isn’t the only factor merchants should consider when looking to scale their business across geographical borders. For consumers making cross-border payments, mitigating the effects of unfavourable foreign exchange rates is clearly preferable. One factor that could prevent international customers from engaging with an overseas merchant is the lack of visibility on what they will actually end up paying for the goods or services, as the total will be calculated via their payment provider or bank’s exchange rate. This lack of certainty will have a dramatic effect on checkout conversion. Similarly, fluctuating exchange rates can also contribute to the consumer’s lack of visibility of the final payment amount.
And in addition there may even be a supplemental charge imposed on the transaction to compound receiving a below-market exchange rate, making the cross-border payment even more expensive for the consumer.
For merchants that wish to sell internationally, accepting payments in multiple currencies and consequentially minimising consumer issues surrounding cross border payments makes sense. The capability for customers to pay in their local currency worldwide is a beneficial differentiator; consumers that are able to pay payments for good and services provided by an overseas merchant in their own currency are extremely likely to choose to do so over paying in the currency of the merchant, if presented with the opportunity.
How Skrill and Magento are leading multicurrency acceptance for merchants
At Skrill we acknowledge that merchants are increasingly demanding the facility to offer a checkout with multiple currencies to their customers. With our partner Magento we have ensured that our merchants would be able utilise this. Implementable within hours, the hosted payments solution’s capability to process multiple currencies is contributing to strong international growth for merchants.
To discover more about this solution visit our website.
Let's look at how Digital Wallets can work for your business.