Why Local Currency Matters When You Are Selling Online | BlueSnap

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Why Local Currency Matters When You Are Selling Online

Written by: Hanna Wolsfelt

As cross-border eCommerce rapidly expands, local currency is becoming more and more important for merchants selling online. But what exactly does this mean? There are presentment currencies, settlement currencies, and local pricing – how do they all fit together to make your eCommerce site friendly for international customers? Not to fear, we’ve got your guide to increasing sales and conversions with local currency.


Have you ever purchased something without knowing the price? Maybe you have, but probably not often. Yet, that is what you are asking your customers to do by not presenting the price of your goods and services in their local currency. By local currency, I mean the currency used in their home country to make everyday purchases. The industry refers to this as the presentment currency – the currency you “present” to your customers on your website. If you are not displaying the appropriate currency to your customers you are causing friction in the checkout process and are losing sales. If you are only pricing in USD, for example, chances are people in the UK are leaving your site and purchasing the product from another site that has the product in their own currency. And even worse – chances are good that they will also never return to your site – ever again!


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But even if you are fortunate enough to have a customer attempt to make a purchase on your eCommerce site not using their local currency, you face another obstacle – payment conversions. Have you ever had a transaction declined by your issuer because they suspected fraud? Issuers know your shopping patterns and when something doesn’t fit the norm – fraud detection kicks into high gear. Here in the US, an individual may get declined for purchases outside of their home state. So what do you think will happen if they are not allowed to buy in their local currency of USD?


And finally, pricing in the local currency means your customer is not paying currency conversion fees that might be charged by their issuing bank.


Ok, enough with the importance of local currency. Now let’s talk about local pricing. So you’re now pricing in the local currency – that’s great. But is your price in the local currency left to the mercy of someone’s FX rate that you are using? You need to also consider the price of your goods and services in the country you are trying to sell. Are your goods and services priced competitively in that country? You may want to set a price in the local currency rather than leaving the price to be randomly set by an FX rate that either you or your processor may be using.


So now that you have your shoppers paying in the right currency, how do you want to be paid? If you are taking payments from shoppers in USD, CAD, and EUR do you want to be paid in these same currencies? The currency you select to be paid in is called the settlement currency. If you are an international business with international operations needing operating funds, make sure your processor can settle in different currencies. Otherwise you are probably incurring FX fees from the processor to convert the funds back to a single settlement currency.


If you need help figuring out the world of currencies, we are here to help. We have 100 currencies available for you to process in! If you need further assistance, drop us a line:

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