Thanks to the internet, it is now becoming just as easy to order from a site headquartered thousands of miles away as it is to buy locally. As a business owner, it stands to reason that you want to capitalize on the deep global pool of customers that have recently become available to you. Before you jump in head-first, however, you should learn about the pros and cons of having a multi-currency website.
It attracts more customers.
As we said above, the marketplace has expanded to include buyers on virtually every continent. If your shopping cart software is set up to accept multi-currency payments, your site will be all the more appealing to consumers who may not use your native currency. Your willingness to go the extra mile in providing people with the option to use their own euros or yen or dinars will minimize the chances of shopping cart abandonment, confusion, and misunderstandings at checkout. It will also facilitate a more positive customer impression of your website.
It enables you to streamline your financial records.
Running an international business is exciting, but it can contain a confusing array of pitfalls, particularly when it comes to keeping your bookkeeping organized. If you have a different website for each country you serve, the situation can deteriorate rapidly. On the other hand, running one site that accepts the currencies of all nations where your customers live can go a long way toward helping you to keep your financial information in order.
It keeps customer costs down.
When a customer visits a website in a different country and chooses to make a purchase using their credit card, they will inevitably be charged conversion fees. Often, people are unaware that they will be burdened with this additional cost until they receive their next credit card bill. To make matters worse, the statement the cardholder receives may in many cases make it appear that the charges are coming from you when these cross-border fees are actually being incurred by the user’s own card-issuing bank. This can lead to dissatisfaction with you and your business, the likelihood that the customer will never return to your website again, and the possibility of a costly and protracted chargeback process.
It helps you be more competitive.
At one time, merchants only needed to worry about the retailer around the corner or across town. However, today’s cosmopolitan economy means that entrepreneurs must be concerned about rivals from all over the world. Anything that one enterprise does to set itself above the rest might mean the difference between success and failure. Deciding to accept multiple currencies can help you win over a wider swath of customers, leading to greater popularity, higher sales, and extended loyalty.
It comes with higher maintenance costs.
Not surprisingly, these advantages do not come without a cost. In part because of their unified capabilities in terms of taking payments from consumers, multi-currency websites tend to require more maintenance and oversight. For instance, you will need to have a number of different payment gateways, various pricing tiers to suit each of the nations you serve, and probably several sets of shipping options as well. Furthermore, you can expect to shell out higher exchange rates for the currencies that your site supports.
Complex taxation and exchange requirements.
Unless you are an accountant or attorney specializing in international law, you are probably vague at best about the laws and tax requirements that go hand-in-hand with running a global enterprise. For that reason, most merchants who own companies that do business with other nations elect to hire personnel who specialize in the intricacies surrounding taxes, customs law, and so forth. Doing so involves an investment of time, as well as diligent research, in order to find the professionals who can best help you tackle these complex issues.
Is a multi-currency website right for your business?
On the surface, it might seem like having the ability to accept payments in the currencies that match your customers’ preferences is always the best idea. After all, why wouldn’t you want to offer customers the easiest and most comfortable ways to pay?
That being said, it is important to understand that anyone in any country who has a major credit card such as Mastercard or Visa can make an international transaction without difficulty, whether or not the site accepts multiple currencies. The customer’s card-issuing bank simply takes care of all of the details of foreign transactions without any fuss.
For that reason, there are times when it is better for businesses to continue to use a single-currency site. For example, imagine that you have a very small business with a dangerously thin profit margin. As much as you would like to provide international buyers with flexible and frictionless checkout options, you simply might not be able to afford the high overhead costs at this time. In that scenario, you would be better off letting the customer’s bank take care of the foreign transaction procedure.
Some companies choose to provide buyers with a useful compromise. Customers are given the opportunity to click on a link on the page that leads them to a currency converter calculator. With this handy device, they can receive an accurate idea of how much they will need to shell out for the products or services they are viewing on the site.
Accepting multiple currencies has the potential to provide your business with a host of advantages: boosted sales, a larger and happier customer base, streamlined financial management, and perhaps even an edge over your biggest rivals. Even so, this option is not right for every merchant. Before you take the leap into multiple currency acceptance, devote time to thoroughly scrutinizing your company, the customers you serve, and your future goals.