Pros & Cons: Receiving Foreign Currency Payment
Global expansion is easier than ever — but you need a robust strategy to do well overseas. Read on to learn about the pros and cons of local currency payments and how you can control currency conversion charges
The digital revolution has made global expansion easier than ever for small businesses. With international e-commerce sales expected to rise to $8.1 trillion expected to rise to $8.1 trillion by 2026, small businesses can take advantage of global growth and increase their profitability by selling across borders.
However, small e-commerce businesses often hit a stumbling block when it comes to getting paid in a foreign currency. The international payments industry is hugely complex, creating roadblocks to growth that can be challenging for small businesses to overcome.
So, what are the pros and cons of getting paid in a foreign currency by international customers? How are innovative payment solutions facilitating greater small business expansion and making complex foreign currency exchange rates easier to understand? What should e-commerce sellers look for when selecting an account to get paid in a foreign currency?
In this article, we’ll examine the pros and cons of getting paid in foreign currency by international customers.
Pro: Customers prefer paying in local currency
Surveys show that customers are more comfortable than ever in engaging in cross-border commerce; however, customers demand transparent payment solutions. Specifically, this means facilitating transactions in customers’ own local currency so that they can understand the value of your goods more effectively. As a result, if e-commerce sellers don’t provide customers with local currency options, they could seriously limit their growth potential while trying to penetrate new markets.
As e-commerce sellers are all too aware, any delay to the checkout process is hugely detrimental to conversion rates. E-commerce sellers should always make checkout experiences as seamless as possible by offering currency values customers immediately understand to encourage sales.
Con: Small businesses have to shoulder the costs
Customers worldwide want to pay the price as listed and not pick up additional charges for choosing to do business with you. Ironically, transaction fees are typically added on at the checkout stage, almost as an afterthought. Yet, unexpected price increases are hugely detrimental to customer confidence and can make or break customers’ purchasing decisions.
As a result, e-commerce sellers feel they need to shoulder the cost of foreign currency transactions to ensure customers pay the advertised price. Unfortunately, opaque fee structures make the problem worse, as small businesses are unable to effectively forecast their profitability in their target market.
Pro: Not all e-commerce sites support getting paid in foreign currency
Some businesses choose not to accept getting paid in foreign currencies, providing a huge competitive advantage for the small e-commerce sellers that do. In an increasingly competitive market, the best way to differentiate your business is to provide a superior customer experience.
In fact, research from PYMNTS shows that the top-performing international e-commerce businesses support as many as 24 different currency options, meaning that flexible payment solutions are a reliable way to grow your business.
Con: Accounting for local preferences everywhere makes getting paid in a foreign currency complicated
Time-poor and with limited resources, small e-commerce businesses live or die by the features of their platforms. Yet, sellers are often too busy to research the local preferences of each market they hope to serve.
Unfortunately, most e-commerce platforms don’t have a simple method for sellers to easily account for local preferences. In turn, international customers don’t receive an optimized checkout experience, which further strains struggling conversion rates. So, small businesses need to partner with a reliable currency partner to ensure accepting overseas currencies is as easy as possible.
How modern payment solutions can make getting paid in a foreign currency a growth opportunity
Business-centric third-party solutions like Zyla are ideal for companies with international expansion strategies: Zyla offers a one-stop solution for cross-border trading, which makes international business payments easy.
At Zyla, sellers are charged based on the volume of foreign transactions. Rather than penalizing businesses for every sale made to a foreign customer, Zyla pricing is based on a company’s annual trading volume. In other words, the more you trade, the less you pay. Zyla reviews each client account on an annual basis and adjusts fees accordingly.
Minimizing foreign currency exchange rate costs for small businesses
Sellers can and should expand their businesses internationally and take advantage of the massive expected growth in e-commerce opportunities in the coming years.
New payment solutions provide the essential infrastructure for small businesses to achieve this affordably and predictably. By minimizing the previously prohibitive costs of doing business across borders, sellers can realize their full potential like never before.
However, small businesses must choose the best payment solution for their expansion efforts, specifically by partnering with a payment platform that has experience supporting small businesses’ development across borders.
With transparent costing and volume-based charges, e-commerce sellers can be empowered to gain control of their finances as they embark on an exciting international expansion journey.
Get paid in foreign currencies with minimal costs to scale your e-commerce business across borders
The Zyla Account is the hassle-free way to pay business partners and get paid from marketplaces quickly.
- Open multi-currency accounts with local account details
- Make fast and secure global payments to suppliers, staff and partners
- Collect funds from marketplace sales
- Keep costs down with competitive rates
The free-to-open Zyla Account enables businesses to make collections and payouts internationally – giving you the freedom to do business anywhere, all with the security of our online platform. Open an account today and you could be approved, set up and trading internationally in 24 hours. Get started or find out more by calling (855) 797-3366 today.
