Expanding your business into the global marketplace is a dizzying prospect. Although it is brimming with the potential for a widened customer base and increased profits, it is not an undertaking that you should launch without doing some thorough research in advance. To that end, we have compiled this guide to multi-currency payment processing as a tool you can refer to before you begin to accept overseas payments. Once you understand the basics, you’ll be better equipped to take full advantage of global e-commerce.

1. Accepting multiple currencies brings numerous advantages to your business.

The initial question that must be answered is why you should bother accepting international currencies in the first place. After all, customers can pay with their credit cards from anywhere, can’t they?

If you have any remaining doubts about whether you should accept overseas payments in your customers’ currencies of choice, consider the following advantages. Doing so:

• Provides transparency because your customers will not be charged foreign transaction fees. When you have relationships with local financial institutions in the nations you market to and allow your buyers to pay using their native monetary denominations, they will not need to endure the extra expense and confusion of foreign exchange fees. These often alienate shoppers and can also cost you money in the long run.
• Engenders trust. As an international seller, you already need to overcome buyers’ wariness about sending their money overseas. This is magnified if you are asking them to do so in a currency that is unknown to them. When you display exactly what the person will be paying in the currency that is familiar to them, your store will gain credibility. Extending the courtesy of transparency inspires trust and long-term loyalty and just might even motivate shoppers to refer your business to their friends and family.
• Minimizes chargebacks. Although you will never be able to completely eliminate charge disputes and forced refunds, providing multiple payment options to your customers markedly reduces the likelihood that they will file a dispute with their bank due to confusion over something that appeared on their bill. Once again, it’s all about establishing your business as a reputable one that international buyers can trust.
• Sets you apart from your competition. From whom do you think an international customer would prefer to buy: A store that offers pricing and payments in their local currency or one that does not? In today’s cutthroat commercial climate, you need to adopt every strategy possible to differentiate yourself from your rivals. Configuring your website to accept multiple currencies is a straightforward and extremely effective way to get a leg up over the rest.

Now that you have a clear idea of the pluses of conducting global ecommerce in your customers’ currency of choice, it’s time to look at other vital facets for the success of a global business model.

2. Understand your customers.

No doubt, you already understand the power of analytics. When you use these robust data tools, you can learn valuable information such as who your customers are, what demographic factors set them apart, and even what products they prefer. As you contemplate stretching your business to encompass foreign buyers, you should also employ analytics to help you determine what your customers’ preferred payment methods are.

First, determine which countries you will be targeting. Then make it a priority to learn how local buyers prefer to pay.

For instance, in Kenya and many other African countries, mobile payments through the M-Pesa system are the norm. At the same time, the majority of Europeans still would rather use localized options in real time through their bank. Alipay remains the payments king in China, and many Indian customers continue to choose to make payments to their bank over the internet.

In the same way that pay-at-the-table devices are gaining traction in restaurants, the popularity of digital wallets and other mobile payment systems is steadily increasing in all parts of the globe. When you take the time to understand the unique cultures and preferred payment methods of your international customers, everyone wins.

3. Choose an optimal international ecommerce platform.

The security and credibility of your online store are wholly dependent on the quality of the ecommerce platform you employ. Take the time to find one that is tailored to your business’s unique needs and you will be rewarded with data safety, loyal buyers, and assistance from the vendor should a problem arise. The platform you use should comply with all security regulations in your native country and in every nation you serve. It should also be capable of accepting multiple currencies and offering automated pricing that converts currencies and calculates exchange rates for you so that you don’t need to do so manually.

4. Upgrade your accounting system.

Accepting multiple currencies expands your outreach and pleases your customers, but it is likely to stretch your entry-level accounting software to its limit and beyond. This is especially true if you have established a new legal entity for your international business. You will need a system that has multi-entity accounting capabilities, one that can also administer exchange rates, create reports, and put them into your home currency while calculating foreign currency gains and losses. An enhanced accounting system can accomplish these jobs flawlessly through automation and is therefore a potential investment you cannot afford to overlook.

5. Understand tax structures.

Import and export duties will vary widely depending on which countries you plan to serve. If you don’t understand the details of these charges, as well as value-added tax regulations, you will not be able to create a fair pricing structure that offers competitive costs to your customers without cutting too deeply into your profit margin. Because this can be a complex arena with complicated laws and regulations, many businesses elect to hire the services of a third-party expert in this field. This takes the pressure off you and/or your Accounting Department while simultaneously ensuring that you have not overlooked anything important that could come back to hurt you down the line.

Widening your reach into the international arena is one of the most effective moves you can make if you want to deepen your customer pool and grow your profits. Just be sure that you have a comprehensive plan that makes the needs and preferences of your new customers as well as those of your growing business a top priority. Then sit back and watch your reach broaden.