Global commerce is an enormous opportunity, and to be successful, you need to be able to sell to buyers in their native currencies. The more countries you expand to, the more currencies you’re dealing with. How will this impact your business? That all depends on your approach.
The reality is that failing to process transactions in local currencies for your customers leads to:
- lower approval rates from local banks and
- lower sales numbers because of friction in the checkout process
Embracing local currency payments and offering the right online or mobile checkout options eliminates these worries: local currency compatibility leads to higher conversion rates, customer satisfaction numbers and more money for your business.
1. Increase Bank Approval Rates
It’s important that you reduce as much friction as possible when it comes to payments — particularly in the back-end processing. The higher the friction in the system, the more likely for your business to lose out on important transactions and revenue.
One point of friction easily remedied by local payment processing? Bank approvals.
The speed and rate of in-country bank approvals are vital for thriving international businesses. After a customer pays, the transaction is either authorized or rejected by their card issuing bank. Typically, banks prefer currencies local to their region, especially if processing with local acquiring. Local acquiring means vendors can accept card payments via a local bank network. This type of transaction has a higher approval rate, and reduces cost from cross border fees.
For example: let’s say a Brazilian bank is processing a customer’s transaction. The most frictionless scenario is if that transaction appears in Brazilian real on a card issued in Brazil. The bank will be more likely to approve the transaction, and the vendor and customer can both enjoy a frictionless process free of unnecessary declines.
But if the transaction comes up in international currency the bank is more likely to decline the transaction due to perceived risk, which leads to dissatisfaction for all parties involved — and lost sales.
Partnering with a payment solution that local currencies has been shown to increase sales by an average of 12%, according to our data. This ensures a pain-free transaction that will result in more satisfaction and profit in the long run.
2. Increase Customer Satisfaction and Conversions
Have you ever been excited to buy something, only to be deterred because you weren’t sure how much the item actually cost? Or maybe you bought something only to be surprised by a foreign transaction fee on your bank statement? This is not the buying experience you want to create for your customers.
Unfortunately, international currency complications can be deal-breakers for many customers at a variety of points along their journey.
Let’s start with the checkout process. When only a bare minimum of languages and currencies are offered, vendors can experience high rates of cart abandonment. However, when you offer (automatically recognized) local currency and language compatibility, you can radically transform the buyer’s experience. Customers are more likely to complete the checkout process if they see prices and currency symbols they immediately recognize and understand.
Buyers will also be more likely to stay on your checkout page. If you only display US dollars, any shoppers beyond those borders would have to open a new tab to search current or predicted foreign exchange rates, their credit card’s policy on overseas purchases and more. Each obstacle reduces the likelihood of a purchase.
Disputes and Chargebacks
A seamless buying process also has positive downstream effects. If customers are clear on the amount they are paying in their native currency, they are less likely to dispute transactions or initiate chargebacks. Disputes happen when customers challenge the final total, often because they weren’t sure of the final cost. Chargebacks occur when customers dispute the charge with their card issuing bank instead of the merchant, which can result in a lost sale and additional chargeback fees.
Neither of these scenarios are good Vendors miss out on revenue through cart abandonment and delayed or even canceled transactions from disputes and mistaken fraud. And dissatisfied customers won’t make repeat purchases, recommend the business or leave a positive review.
It’s important to offer features that provide a local experience with local currency. That simple switch can completely turn around the shopper’s experience and positively impact business and satisfaction.
Offer the Best International Experience with Local Currencies
It’s possible to provide a top-notch international shopping experience that is frictionless and localized for your customers, and high conversion rates for you. At BlueSnap, we offer two options to help businesses grow globally:
1. Hosted Pages
With a single connection to BlueSnap, companies get:
- Access to 100+ supported currencies immediately
- The benefits of our network of global bank connections across a variety of regions
- Intelligent payment routing that sends payments to the best bank for the specific transaction to increase authorizations
2. Flexible API
This includes everything above in a flexible API that gives your developers more control:
- Good for businesses with internal capacity
- Relies on coding how you want to handle transactions across currencies
- Lets businesses customize or limit the currencies they support
Both solutions offer businesses the functionality they need to cater to the international marketplace and quickly support transactions.
Interested in learning more? Talk to one of our experts.