Why multi-currency processing is a cost challenge for an online business

Exploring the cost challenges associated with processing in multiple currencies

Author: Phill Evans
Date: 22 Apr 2020

Why is multi-currency processing a cost challenge for an online business?

For a growing online business, it's challenging to sell goods and services to international customers. Get it right, and you can dramatically increase sales – the statistics say by over 30% in most cases. However, once you start accepting transactions in multiple currencies there are ongoing challenges that can offset the benefits unless you can afford to have someone skilled in your finance team to continually manage your online payments.

One of the biggest challenges is cost management. If you’ve only traded in your domestic currency to date, you’ll need to speak to your merchant acquirer to get set up with the ability to transact in multiple currencies. This comes at a price. It can often be many times more expensive to take payments from international cardholders and have the monies settled into your domestic business bank account in your home currency.

Why is it so costly? Well, let’s face it, unless you are already processing very large volumes, you won’t be attractive to most of the bigger acquirers that offer multi-currency transaction processing. It's just simple economics. Big acquirers put all their efforts into servicing their biggest clients and often aren’t interested in the others. Why, because they don’t make them enough money! Small merchants aren’t a consideration because they’re not normally thinking about selling internationally and those that sit in the middle are often overlooked. We call these businesses ‘the missing middle’.

How big do you need to be in order to get favourable rates from your acquirer?

Well, this is the crazy bit. From our experience, unless your business is processing multiple millions of Pounds, Euros or Dollars, you’re likely to be sitting in that ‘missing middle’ category. You’re unlikely to have much bargaining power and you’ll probably paying at least 2%-3% on top of your normal, domestic processing fees. So, normally you’ll pay way more to sell your goods or services to an international customer! Is that fair? We don’t think so.

At FXCPay, we’ve found a way to help smaller businesses who wish to trade internationally. Our multi-currency pricing module enables your business to take international online payments for a total cost of 1% (including interchange and scheme fees). Yes, we’ve found a way of making it fairer and cheaper for everyone. We work with acquirer partners that really want to help their customers and working in partnership that means we can often offer merchants a multi-currency transaction processing service for less than it costs them to process a domestic transaction! Cardholders also benefit as they pay in their domestic currency, giving them price transparency and in most cases saves them having to pay those annoying foreign transaction fees that most issuers apply.


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