Historically, the international ecommerce market has been beyond the pale for most online stores. The vagaries of duties, taxes, cross-border processing fees, and exchange rates have prevented small and medium sized businesses from even attempting to expand into the $1.3 trillion dollar foreign online marketplace. Luckily, new technology bridging the gap between national currencies, so more companies can make global sales with a minimum of friction.
Some of the top multi-currency processing (MCP) solutions are easy to install in an online shopping cart, and make the international shopping experience transparent for global users. Shoppers can make purchases in their own currencies, using payment cards from local banks. Pricing in local currencies reduces the fear, uncertainty, and doubt associated with internet sales. On the back end, software routes transactions through the least expensive channels possible in order to avoid many of the barriers that previously made global sales unprofitable.
For online sellers, local market pricing is a key advantage and incentive for expansion. Some products have higher prices abroad than they do in the US, so the profit margins are wider. When positive exchange rates are factored in, there is an even greater opportunity, and studies have shown that MCP generates an average of 12% in revenues thanks to several convenience factors . Furthermore, multi-currency processing differentiates your store from domestic rivals who may be able to undercut your prices at home, but who have no presence abroad.
As always, there are caveats and considerations when making sales abroad. First and foremost it is important to understand all the duties and fees associated with making a sale. Secondarily, the cost of shipping cannot be underestimated, since “free shipping” could be unprofitable and added costs at checkout could cause shopping cart abandonment. When making sales in countries with widely fluctuating exchange rates, it is important to settle batches quickly and have pricing that stays current in order to avoid losses on arbitrage. As always, it is critical to keep up with financial and global news in order to stay abreast of global export regulations, sanctions, and restrictions. Even if you are just selling digital downloads, there are some kinds of software that can’t be exported to all nations.
At CPN, we have access to MCP solutions designed to help companies take advantage of the growth in global e-commerce. We have solutions for smart transaction routing, decline recycling, and even the automatic updating of card numbers used in recurring billing. With our suite of solutions for international online sales, we can help your business expand its global footprint and become better poised for worldwide growth opportunities.