Complexities of Multiple Currency Processing



Posted: Thursday, January 20, 2011

by Caroline Hometh
RocketPay

Multi-currency credit card processing is the ability to send a transaction to interchange for authorization in a number of international currencies.  That said, there are many layers to this rapidly expanding global service, and being able to peel those layers away is paramount to offering an effective solution.

First and foremost is understanding what a merchant wants and needs.  One merchant may wish to offer their customers a handful of currencies, yet settle in the currencies of Europe.  Another merchant may come along and have a completely different list of currencies they want to sell and settle in.  In order to find these merchants the best multi-currency processing solution, you must be able to identify their specific business requirements and then match them with your best options.

Therein lies the next complexity—understanding your options.  For example, when working with a European acquirer, they may offer many currencies to authorize in, but depending upon where the customer is located or where their card has been issued, the transaction may settle using different interchange—domestic or intra-regional, or even inter-regionally.  The size of your merchant also comes into play.  When a merchant has a large, complex multi-national business, they may be better off registering in different parts of the world.  They may need more settlement solutions and may want domestic global acquiring.  A smaller merchant may not need these options and may only want to settle in USD.  It is important to have all types of solutions in your multi-currency processing tool bag.  You cannot decide for a merchant how they conduct their business, but you can present yourself as a knowledgeable sales consultant who understands their needs and provides effective multi-currency processing solutions.

In the past, processing has been fairly simple.  Merchants located in the United States sell and authorize in US dollars. The complexities they face involve different terminals, different applications but are always settled in USD.  Most US acquirers are licensed with MasterCard and Visa only in the US region.  Now, with the widespread acceptance of multi-currency processing and international acquiring, licensing with the card associations in different regions meeting complex merchant requirements come into play.  That also means understanding where the customers are located in the world and what kind of treasury requirements the merchant has.

Here in the United States, when a merchant sells and settles in USD, there are no treasury concerns.  A merchant who wants to sell in different parts of the world has to make business decisions about what types of currencies they want to sell and settle in as well as where they want those monies to be wired.  Do they keep their transactions settlements in the same currency?  Do they want to manage their own currency fluctuation?  Do they have suppliers who need to be paid in certain currencies?  As you see, processing issues for these merchants are much more involved than those of typical U.S. domestic merchants.

How can you overcome these complications?  Find a multi-currency processing partner who truly understands the issues and is willing to educate you.  As with selecting any type of strategic alliance, you have to do your due diligence.  For example, you may have a merchant who is approved in the US but will not be accepted by European or Asian acquirers.  These regions represent different cultures and do business differently.  Your multi-currency processing partner needs to have knowledge of those cultures, understand the nuances of their business practices and have an established reputation of offering effective global solutions.

 Take the time to compare multi-currency processing to what you are used to selling.  For example, in order to be effective to sell to restaurants, you have to ask the right questions and understand their needs—are they fine dining or quick service.  You have to offer the appropriate solutions with credibility.  The same goes for the international arena.  The approach is the same—the questions are different.  Does your merchant need to translate their website?  Do they need IPGEO-Location technology tools?  This recognizes where the customer is coming from and can default to their own language.  For example, if the customer’s address is located in France, they probably want to speak in French and buy in Euros.  A smart merchant, who wants to sell on line worldwide is going to look for ways to make their global customers feel as welcome as possible.  They have lots of options and choices.  For example, do they want to use “international flags” on their website whereby their customers can click onto their country’s flag and the currency is defaulted to that country?  Do they want to use a drop down box to allow their customers to select a certain currency?  With a restaurant merchant, a trained sales professional knows to offer a different program for fine dining versus QSR.  That same trained sales professional needs to be proficient with the new vernacular of multi-currency processing and know which questions to ask.

 It is important to also recognize that multi-currency processing doesn’t work for all types of merchants.  It is not recommended for small merchants who just don’t possess the necessary infrastructure.  It is recommended for the “sweet spots” categories;—digital downloads, hard goods, electronics, travel, card-not-present, catalog and high risk categories (emotional content).

 Despite the complexities, it is essential to offer multi-currency processing in today’s competitive and domestically shrinking marketplace.  If you have any e-commerce merchants, you must consider getting into the multi-currency processing game, or you will lose your merchants to someone who’s already on the playing field.  This is a rapidly expanding segment of the industry and the experts don’t foresee any decrease in momentum.  In the current economic climate, multi-currency processing is one of the few arenas that is red hot. RocketPay can help. Contact us at www.Rocket-Pay.com.
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