Thanks to the proliferation of advanced technologies and e-commerce platforms, businesses can now more easily connect with consumers around the world. What’s more, the consumer sector is expanding everyday, providing more opportunities for global relationships and rising sales – Woo Commerce reported that by 2025, the global consumer market will expand by 75 percent, and these 4.2 billion individuals will spend a combined $30 trillion annually.
As companies seek to reach buyers outside of their own borders, there are a few essential elements to keep in mind, particularly when processing other currencies:
Preferred payment methods
A smart move for global organizations is to tailor their payment processing practices according to their customers’ and vendor partners’ preferences. Woo Commerce contributor Sue Park underscored the importance of learning the preferred payment methods of the company’s international customers – for instance, nearly half (46 percent) of German transactions are paid for with online bank transfers, and 60 percent of payments in the Netherlands are carried out through direct debit.
Once stakeholders understand the types of payments their global customers and vendors will seek to use, they can ensure that their financial payment processing technology can support their needs.
Exchange rates and returns
It’s also important, particularly from an e-commerce perspective, that prices are listed for customers in their local currencies. This way, consumers and partners don’t have to conduct their own research to determine prices, and can pay using familiar currency.
However, it’s imperative to keep exchange rates for different currencies in mind, and ensure that prices are updated based on these changing rates. As Park noted, businesses usually have two options here – to either convert the payment according to the exchange rate at the time of withdrawal from the business’s account, or automatically convert the currency when the transaction takes place.
It’s also important to keep the exchange rate in mind during the return process. As MINDBODY noted, this could impact reimbursement.
“Due to the fluctuation in the rate exchange, you and your clients may see different amounts on your bank records,” MINDBODY stated. “For example, the amount you refund will appear in the client’s bank account as a smaller amount than the original charge due to the fluctuation we can see with exchange rates.”
Cross-border transaction fees
Enterprises that do business globally will also have to observe cross-border fees that can impact credit card payments. As BigCommerce noted, both Visa and MasterCard charge fees for processing foreign payments, depending upon where the business is registered, the location of the institution that issued the payment card and other assessments.
“Cross border fees are an expense, both in terms of money and time, but these costs are often overshadowed by revenue opportunities in international markets,” BigCommerce pointed out.
Automation for multi-currency payment processing
One of the best ways to support global transactions is with an advanced Treasury Automation Suite, like that provided by SK Global Software. This powerful platform includes Vendor Payment Automation, enabling direct communication with any bank across the globe to support streamlined international electronic payments.
To find out more, connect with the experts at SK Global Software today.