The Journey of a Dollar: A Visual Guide to Multi-Currency Transactions

Want to process international transactions for your business? Check out this infographic to learn about multicurrency processing, international ecommerce, foreign transaction fees, and more.

First: Why Global Ecommerce Matters

Online shopping channels make it easy for today's shoppers to get the goods they want from the best retailers around the world.

• Ecommerce, including international ecommerce, is the fastest growing global retail channel through 2022, according to Euromonitor International.
• Shopping done on smartphones, or mobile commerce, leads the way. By 2020, mobile ecommerce payments are expected to make up half of all online sales, worth $250 billion a year, according to a study by UPS.

Considering ecommerce growth and global shopping trends, accepting foreign transactions makes sense.

• International trade will grow by 4.4% in 2018, according to the World Trade Organization.
• The majority of global shoppers (57%) have made an overseas purchase in the past 6 months, according to Nielsen research.

Shoppers are increasingly comfortable with purchasing from foreign retailers when the quality of the product is high.

Global Government Regulations on Security

As foreign currency transactions expand, there are regulations in place to protect consumers and ecommerce businesses with global reach.

The United States and 28 other countries, working together as members of the Organization for Economic Cooperation and Development, have signed ecommerce guidelines including:

• Ecommerce merchants must provide an easy-to-use and secure method for online payments.
• Global ecommerce businesses must adopt security measures appropriate to foreign exchange transactions to make sure personal information is less vulnerable to hackers.

Any ecommerce business selling in Europe must adhere to General Data Protection Regulation (GDPR) guidelines.[6] For processing multi-currency transactions, best practices include:

• Don't collect or store data you don't need.
• Explain why you are collecting any type of information – a phone number, for example.
• Make sure terms and conditions are clear.
• Remove pre-ticked boxes.

Use a payment processing solution that meets all global ecommerce security standards to protect your business from costly fines and/or lawsuits.

Benefits of Accepting Foreign Exchange Transactions

When a business accepts payments from foreigners, there are some risks that may be involved. These occur:

• When a business forces a customer to pay in a foreign currency.
• When a business sets prices in foreign currencies based on today's rates.

Pitfalls can include:

• Chargebacks, because customers who are confused by pricing may dispute a charge.
• A high bounce rate, because price differentials turn off customers.
• Fluctuating exchange rates, which can diminish the value of a product when rates plummet.

Accepting multi-currency transactions that adjust automatically based on current exchange rates mitigates these risks.

• Shoppers won't have to pay a foreign transaction fee, which averages around 3%, according to ValuePenguin.
• Shoppers will know exactly how much they're paying.
• Shoppers won't be confused about pricing, which can decrease bounce rate.
• Shoppers pay the price that is always equal to your native currency's value.

When you accept international transactions, the customer experiences a transaction that is familiar to them. Your business gets full value for each product. You can increase sales when customer satisfaction improves.

International Payment Security Risks to Be Aware Of

When your business processes foreign currency transactions and widens its reach to an international market, protect your business by being aware of certain international security red flags that could signal fraud. A 2018 report on global fraud by, consumer credit report agency Experian, found 63% of businesses have experienced the same or more fraud losses in the past year.

When processing foreign transactions, be wary of:

• An unusually high number of international orders. If you can't compare the order number to other typical orders from that country, compare the number to your typical average order amount across your business.
• Orders from high-risk countries listed by the Office of Foreign Assets Control. As of November 2018, these included North Korea, Syria, Iran, and Iraq, in addition to about a dozen others.
• Orders connected to suspicious email addresses or suspicious physical addresses.
• Shipping and billing addresses don't match.

Businesses can contact the person who placed a suspicious order to confirm it before processing. Businesses that work with a payment processor with built-in fraud protection can also receive alerts from their merchant services provider on potential security risks.

Best Practices for Multicurrency Processing

Foreign transactions security is important for both your business and for your customers. According to the Experian report, 27% of online shoppers abandoned a transaction due to a lack of visible security.

Make your global ecommerce business more secure with these tips:

• Use HTTPS (Hyper-Text Transfer Protocol Secure) security to give consumers a secure connection to your website. It's also a ranking signal for search engines like Google.
• Accept major payment methods that global consumers trust and are familiar with, such as Visa and MasterCard, which have built-in security measures, as well.
• Follow the security best practices for each payment method you accept. Visa has unique mobile payment acceptance best practices, for example.
• Use tokenization, encryption, and secure payment gateways during payment processing.
• Protect any computers that store customer data with virus, spyware, and malware protection.
• Use security controls like CAPTCHA forms as a gateway for foreign transactions.
• Translate policies and statements into the languages of international shoppers, so they can read them and fully understand them.
• Follow all PCI compliance standards, which include installing and maintaining a firewall configuration and protecting stored cardholder data.

Ask your ecommerce merchant services provider about the security standards they use to protect foreign transactions before you sign up.

Get Secure Multi-Currency Pricing from Humboldt

An easy way for small businesses that want to accept global payments to do so is to use a secure multi-currency conversion solution. With Humboldt's secure multi-currency processing platform, price differentials are eliminated, and the checkout process is simple. Customers know exactly what they're paying in their native currency, which creates a significant reduction in credit requests, returns, and chargebacks.

Learn more about Humboldt's ecommerce multi-currency solution.