One of the main assets of an e-commerce site is the ability to extend the catchment area of the company almost to infinity. It is possible to pass from a national market to a world target. But such an approach requires the implementation of certain processes and tools including multi-currency pricing. In this article, we make a small overview of the different advantages of implementing a multi-currency pricing on its e-commerce site. Enjoy your reading,
Multi-currency pricing to expand internationally
Multi-currency pricing is a tool that allows a potential customer on your e-commerce site to see the price of the product in their local currency or in the currency of their choice. Thus, the user can pay for the transaction in Canadian dollars, as well as choose to pay in another currency. Usually implemented through a currency selector, this multi-currency pricing has a number of advantages for both the prospect and the seller. First, it allows the site to expand internationally.
When you know that 50% of Internet users who buy have already bought from a site based abroad, you understand the real business opportunities that lie in the internationalization of your site. If, for example, you want to develop on the American market or expand your business in Europe, the global strategy that you will adopt to achieve this goal will necessarily include a multi-currency pricing.
Multi-currency pricing helps you convert more foreign visitors into customers and increase your revenue. It can lead you to create multiple stores and associate each store domain with a preferred currency depending on the user’s location. In addition to the currency switch, the currency selector can be used to allow the customer to seamlessly see the price declinations in each currency.
All these options allow you to display your prices in the customer’s local currency. Either according to the user’s location, or manually to allow the customer to check the application of exchange rates and taxes in a transparent way. All this contributes to the reputation of your e-commerce site on a foreign market. In Europe for example, the Euro is the currency in which you will offer your customers to pay.
Multi-currency pricing to give the buyer confidence
You are also much more likely to make a sale when you allow the customer to see the prices in their own currency. They are aware of exchange rate fluctuations and the application of taxes and other costs, and can therefore make a transparent decision based on the updated price displayed to them. This transparency overcomes the reluctance of customers to pay in a foreign currency.
By adopting multi-currency pricing, you make the experience easier for your customers and they can discover your products and purchase them in their own currency. Sometimes the user doesn’t know the geographic location of the company. They see the right currency, and if they want to change their currency, they can do so with a few clicks. On your side, even if you show the customer the price of your services and products in foreign currencies, you can still settle the transactions in Canadian dollars.
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Multi-currency pricing to improve your conversion rates
The corollary to the previous benefit is that you convert your prospects into customers more easily. Confident customers are more likely to validate their shopping cart. An e-commerce site that removes the barriers related to the choice of currencies and payment methods potentially ensures to maximize conversions and hence, its profitability.
In addition, transparency and access to information in the purchasing process encourages customers not to dispute payment. This reduces the number of refund requests and disputes. Offering a customer the option to pay in the currency of their choice helps to improve the user’s shopping experience for a smooth, clear and seamless experience. Disputes and chargebacks that are due to misinterpretation of prices are reduced with this pricing.
Simply put, it is impossible to penetrate international markets without implementing multi-currency pricing.
Multi-currency pricing to control your margins
Offering multi-currency pricing gives you complete control over pricing. In addition to the taxes specific to each region, you control the application of exchange rates, levies according to payment types, etc. This absolute control over prices ensures that you don’t lose out when major fluctuations occur in the currency market, for example.
Whether it’s currency fluctuations, costs to be absorbed such as shipping costs, you control all costs and can pass this on to the customer in a transparent manner.
To diversify your payment methods
Depending on the region, payment methods may change. Adopting multi-currency pricing to simplify the user journey usually means adopting the payment methods that go with those currencies. For example, the German market is dominated by a payment method other than the US. When you adopt multi-currency pricing, ultimately you are adopting multiple payment methods to enable better conversion and profitability of your site.
If you want your new customers to buy your products, you need to offer them a variety of payment options so that they can find the one they are familiar with. Here, the first step is to learn about the markets you want to penetrate and dominate. Indeed, transactional regulations and habits can vary even for neighboring countries that share the same currency.
In the EU zone, France has a credit/debit card payment habit while in the Netherlands, users prefer the national iDeal system. Outside the EU zone, you have the alternative systems like Paypal, ApplePay, GooglePay, Alipay, etc. which have surpassed the traditional credit cards in some regions.
Adapting your payment methods to the habits of your visitors is therefore essential in simplifying their shopping experience. And the choice of these payment methods is linked to local currencies.
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