In today’s global economy, businesses can stand out among a sea of competitors by effectively leveraging their cross-border expertise. Important attributes like intercultural communication, streamlined logistics and skillful coordination are essential.
Alongside these factors, multicurrency payment processing represents a distinct advantage for international and domestic businesses. Even with the challenges that come with multicurrency support, the ability to offer this service can prove crucial in the current business landscape. Keep reading to learn more about the benefits and challenges of multicurrency support.
Benefits of providing multicurrency support for payment processing
The fact is that multicurrency support brings your business one step closer to enjoying frictionless access to customers and vendors in international markets, broadening your base of potential buyers and suppliers.
Leverage the support of international vendors in your supply chain
Multinational companies often employ international supply chains, but raw materials and manufactured goods aren’t the only things crossing borders. Today, the services provided by knowledge workers, creative professionals and others are often used to support global enterprises. Sometimes these individuals are employed directly by transnational enterprises, and other times they are independent contractors or employed by an international subcontractor.
Multicurrency vendor payments make it possible for large companies and those engaged in international business arrangements to streamline their operations while facilitating convenient payment for their global business partners.
Expand your customer base online
In addition to benefiting from the assistance of international vendors and suppliers, multicurrency payment support can help businesses appeal to an increasingly international e-commerce market.
A 2020 report from eShopWorld using PayPal data concluded that 17% of e-commerce sales would be attributed to cross-border transactions by 2023. Even today, many online shoppers at least sometimes purchase goods internationally. In fact, the report noted that 70% of people in the Middle East who purchased items online at least sometimes bought from businesses abroad.
Multicurrency payment support helps eliminate friction to encourage cross-border transactions, increasing the global market potential for e-commerce companies.
Provide added convenience as a tourism-related business
E-commerce businesses aren’t the only enterprises that stand to benefit from better multicurrency payment support. Brick-and-mortar shops, as well as service industry companies, like those in the hospitality, dining and entertainment sectors, could also stand to gain.
Companies that rely on tourism income or the support of international business travelers can easily appreciate the benefit of accepting digital multicurrency payments. By doing so, they provide a more convenient experience for their customers, who would otherwise have to handle fees from their home financial institutions or manage foreign cash. In fact, cashless travel seems to be fairly appealing for many individuals. According to a 2019 survey of Americans who traveled abroad, Visa found that respondents said they preferred using credit cards for foreign payments 48% of the time. Part of the reason for this number could be that 63% felt having cash on their person could make them a target for theft.
For international customers who don’t have multicurrency accounts or cash, accepting digital payments in their home currency could be a significant convenience.
Challenges of multicurrency payment processing
While the benefits of multicurrency payment support are substantial for businesses, there are some potential hurdles, too. Fortunately, the right software solutions for payment processing can help mitigate these issues.
Managing exchange rates
The values of different currencies regularly rise and fall relative to one another. Managing multiple currencies means that businesses have to be careful to monitor for the best exchange rates in order to avoid losses and maximize the benefit of offering multicurrency support for vendors and customers.
Multicurrency support entails several different integrations, which can be a complicated undertaking. Also, as with all financial software solutions, security is of paramount importance for system configurations that process multicurrency payments.
Businesses need to be able to count on streamlined integrations with:
- Currency trading and settlement platforms.
- Accounts payable payment journals and trading platforms.
Using manual processes and disparate, isolated systems could lead to human error, security vulnerabilities or limited access to the best exchange rates. All of these problems could make it more difficult to take advantage of the significant benefits made possible by offering multicurrency payment support in the first place.
Fortunately, FX Settlement Automation from SK Global Software allows companies to achieve these advantages while providing seamless integration for business customers who use Microsoft Dynamics 365 Finance and Operations or Microsoft Dynamics AX. This solution affords users greater visibility into current exchange rates as well as an easy setup and seamless integrations. Customers can also breathe easier due to the secure creation, storage and transmission of payment files made possible by this solution.
If you’re ready to reap the benefits of multicurrency support, find out how FX Settlement Automation from SK Global Software can help.