multi-currency stratergies

murdoch · Jun 17, 2008

Im re-building my website with its online shop, I sell to different markets and ultimately I can sell same products at a different price in different markets (eg asia vs uk/us)

Do I
a) use multi-currency account online shop and just be fed up that I have to sell everything at the same price everywhere but consider it a simple stratergy

b) run a website with a online shop only in one currency targeted at one market, tell customers if they are from another region and want to pay in another currency they must pay in another way eg paypal/westernunion/local bank deposit or cheque, and also order via email instead of online shop? So i can have different price lists for different regions? and perhaps later.. I can build different sites for different regions and they each have a shop with a single currency?

Is there any other way around this? what do others do? I dont want to just make the difference between regions come down to postage prices as I think a very high postage price scares off people... even if the product is damn cheap.

PeterCarruthers · Jun 17, 2008

I think the most important aspect is to look at what your clients want. I have an online (subscription) community in South Africa who far prefer paying in ZAR (SA Rands) than any other currency. It's great to be able to offer them a stable price, without them worryiung about fluctuations - and they love it.

The negative is that I take a bit of strain each time the Pound notches up against the Rand - which is happening a little too often to be comfortable. But trying to charge ZAR into the UK (or the US) would be useless because they would get confused enough to have second thaoughts.

Steve2507 · Jun 17, 2008

If you have one currency, if a customer pays using another currency their credit card will automatically make the conversion for them.

We sell all around the world but only take payment in GBP and it has never been a problem for us.

ItsARiot · Jun 18, 2008

The thing is with a single currency that even though people can put it on the credit card and it changes the currency automatically they will usually get charged I think an extra 20-30% for the conversion so that could be a bit of a hassle for the people. I think that if you are doing well you should look into multi-currency for your markets and if that is taking from your profit you could charge a bit higher prices for the other currencies. Just make sure that it is still less than the conversion fees.

Steve2507 · Jun 18, 2008

There is a small charge, but nowhere near 20%.

We have always done it and never had a problem.

ItsARiot · Jun 18, 2008

The charge for US customers to use their credit card to pay in pounds is 30% for my bank. I kid you not. I mean it isn't a problem it works...it makes the bank happy.

Steve2507 · Jun 18, 2008

ItsARiot said:
The charge for US customers to use their credit card to pay in pounds is 30% for my bank. I kid you not. I mean it isn't a problem it works...it makes the bank happy.

Wow, that is extreme. I have just checked on the Barclays site and they charge 2.75% (http://www.barclaycard.co.uk/barclays_landing/platinum359bmystuff.html).

ServWise · Jun 18, 2008

For sure if you can sell in your target markets currency then you WILL do better in that market. As a professional hosting company our markets are not limited by the location of the customer so we sell in 4 currencies GBP. EUR (Two languages), USD, AUD and have 5 sites (4 English and 1 Italian), we could sell in more like CAD and NZD and other english (or italian) speaking locations but for now 5 sites is enough.

The reason we have 5 separate sites is primarily down to the software we use not being able to support (Proper) multi-currency so each database has to be configured for a single currency. It makes updating a little more difficult but it works quite well and it does mean we can directly target those markets with separate prices and products in their currency.

ItsARiot · Jun 18, 2008

Steve2507 said:
Wow, that is extreme. I have just checked on the Barclays site and they charge 2.75% (http://www.barclaycard.co.uk/barclays_landing/platinum359bmystuff.html).

Sorry I don't think I was clear I have a US bank account because I lived there for 20 years. When traveling to Europe and using my credit card the US bank (Wells Fargo) charged an extra 30% for conversion/overseas usage. Ridiculous what they can do eh!? The sad thing was I didn't realize that untill I got back and took a look at my bank account...not fun.

PayVector · Jun 18, 2008

ItsARiot said:
The charge for US customers to use their credit card to pay in pounds is 30% for my bank. I kid you not. I mean it isn't a problem it works...it makes the bank happy.

Cant be this high. If it is something is seriously wrong.

The card schemes are heavily monitored on what they charge for currency conversion. The reason is very simply that on unduly high conversion rate could adversely put a card holder at credit risk.

How it works is that at the point of transaction a daily rate is applied. This is slightly hedged by the card schemes as that rate may change throughout the day. It must be hedged because of the delay in the time between purchase and settlement.

The best way to transact in multiple currencies is to transact in a currency and settle into a bank account of the same currency. This way you only have to move money when needed and you can take advantage of currency fluctuations yourself instead of the banks getting it.

Hope that helps.

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