Globalization has accelerated enormously over the past fifty years. More and more people are buying products online or abroad, increasing the likelihood that your site will be viewed by international customers who may be shopping there.
Transnational B2C (business-to-consumer) online sales are expected to double in the next five years, according to Forrester Research.
Allowing these potential buyers to pay in their currency can be the perfect way to increase your overseas sales. And this is where multi-currency payment comes into play.
What is multi-currency?
Multi-currency is simply the process of processing and paying for transactions in multiple currencies. Since most buyers prefer to pay in their currency, this feature can help you increase your income, while providing better service.
In the past, it was complicated to offer to pay in different currencies – especially because of exchange rates, security risks and manual management of all this information within an internal accounting system. But current technology has eliminated most of these problems while preserving the benefits of multicurrency payments.
Here’s an example: you sell your products in euros, but your UK customers pay in pounds, your French and German customers in euros, and your Japanese customers in yen. On your end, you always manage your accounts, sales figures and invoicing in your currency. Everyone wins.
Why is multi-currency so important?
Customers buy more easily when they are offered their preferred payment method and currency.
If your goal is to increase your sales and conquer new markets, a multicurrency service is essential. Here are the main benefits you will get from offering multi-currency payments.
1. End of transaction fees
No conversion fees are applied to clients. This is because if they don’t expect to pay these additional costs, your customers will be unhappy and disappointed with your service. They will therefore certainly not come back to make new purchases on your site.
On the other hand, if you allow them to avoid these fees, your customers will appreciate it and it will keep them coming back for future purchases – or to recommend you to their friends, family or colleagues.
2. Improving customer loyalty
Paying in their currency reassures buyers. They know exactly how much to charge them, so there’s no misunderstanding, questioning or surprise down the road. If everything is clear, the experience is positive for your customers and you instill confidence in them.
And, indeed, trust is one of the key factors in retaining your customers. It is she who will make them come back or not.
3. Reduction of shopping cart abandonments, refunds and delinquencies
Statista indicates that 13% of Internet users abandon their shopping cart if the price displayed is in a foreign currency. Therefore, by offering multiple currencies to customers, they no longer abandon their shopping cart and continue to fill it. Obviously, it’s good for your business.
Additionally, when customers disagree on the amount owed or do not understand their bank statement, they may dispute the charge. Unpaid bills can therefore appear in your accounts – which is not only annoying, it is also time-consuming and it can lead to fees or penalties. In short, it’s bad for your reputation and your cash flow.
How does multi-currency payment work?
Here is a small example to illustrate how multicurrency payment works:
Pierre has a renowned bakery in Paris. People come from far away to visit his bakery and feast on his famous pastries. On the other hand, Pierre sells and ships his products all over the world. Jalil, the owner of a hotel in Dubai, is keen to offer the best to his customers and wants to serve them Pierre’s pastries.
Jalil buys and sells in US dollars, so Pierre creates a quote in US dollars. At this moment, Peter immediately sees the exchange rate of the currency: what is the price in dollars compared to the price in euros?
Once the quote has been accepted by Jalil, Pierre automatically converts the invoice into dollars. Then, Peter can look at his numbers in his invoicing software to see how much this sale is making. No need to recalculate the price in euros: its invoicing tool automatically converts the price in dollars into the currency defined by default, so the sales figures are always up to date.
Pierre synchronizes his invoices with his accounting software. As soon as he receives the payment, he applies the exchange rate of the currency to record the amount and the turnover.
In the end, each of them is satisfied. Pierre doesn’t take any longer than usual to do business with Jalil. Even if he lives on the other side of the world.
How to offer multi-currency payment to your customers
The easiest and fastest way to provide multi-currency payment options to your customers is to use invoicing software that supports this feature. This allows you to calculate exchange rates for your invoices and quotes automatically in real time, so you don’t have to worry about it. Without this feature, multi-currency transactions can be very complicated and frustrating.
Invoicing software compatible with multi-currency payments makes it possible to:
- Create and view all quotes and invoices in multiple currencies
- Convert currencies by product line in your invoice
- Set exchange rates other than those defined by default
- Create invoices or credit notes from quotes in a different currency
- Continue to see your overall revenue, even if invoices are in different currencies
- Synchronize invoices with your accounting software in the correct currencies