Multi-currency Payment Gateway – Everything You Need to Know

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Developments in online payment gateways have made it easier for businesses to process online payments and provide their shoppers and customers with a better experience. While many of these payment gateways are designed to process cross-border payments, they come with a high-cost burden because of the currency conversion fees.

If you’re considering expanding your business worldwide, you should consider using a multi-currency payment gateway. It would reduce the cost conversion fees and make your e-commerce site more user-friendly with a secure shopping experience.

What is a Multi-Currency Payment Gateway?

Payment gateways are a technology that enables online payments. It is the customer-facing portal that lets customers check out. It provides authorisation and approval for the customer’s banking details. Usually, these payments are taken in your home country’s currency.

That means customers outside the UK can pay in their local currency, which has to be converted into GBP through an intermediary step. The cost of currency conversion can be high for the merchant, who has to pay for the cost of currency conversion and additional per-transaction fees.

A multi-currency payment gateway is designed to take payments in different currencies with greater convenience and flexibility. The payments can be settled in a selection of different global currencies to cut down costs. The merchant can withdraw the funds directly into their UK-based account without paying extra fees to convert them into GBP first.

Another benefit of integrating a multi-currency payment gateway is that customers can choose to view the product prices in their native currency or the currency they prefer.

For merchants, a multi-currency payment gateway can have cost-saving benefits which you can pass on to the customers through competitive pricing. Also, the customers might feel safer completing the sale in their preferred currency.

How Does a Multi-currency Payment Gateway Work?

Multi-currency payment gateways and traditional payment gateway systems share a lot of businesses with a few exceptions.

  1. After shopping and selecting their preferred products, the customer is redirected to the payment gateway from your checkout page, where they enter the payment details.
  2. The payment gateway sends the details to the appropriate payment processor, usually your bank, through a secure gateway.
  3. Your bank analysis this information and determines which payment network their card belongs to. It can be a straightforward EFTPOS network or a credit card provider like Visa or MasterCard.
  4. Your payment gets routed to your customer’s bank or credit card provider. The details of the transaction and the amount get authorised using fraud detection procedures to ensure the payment request is legitimate. Once the payment is authorised, you and the customer receive notifications that the payment is complete.
  5. The last step in the process is the most impressive. The money will go through a forced conversion when using the traditional payment gateway, usually at the merchant’s expense. The sum gets changed from its original currency into your receiving currency. But with the multi-currency payment gateway, this doesn’t happen. The money goes to your nominated bank account and is held in received currency.

Key Benefits of a Multi-Currency Payment Gateway

Incorporating a multi-currency payment gateway has many perks for the merchant, which also extend to the end customer.

Cost-effectiveness

Settling transactions in multiple currencies can help businesses do more business internationally without incurring currency conversion costs. By using a multi-currency payments gateway solution, you will be able to reduce conversion fees and improve margins. When piled, the savings can greatly impact your profit margins and help keep you more competitive in the marketplace.

Smoother user experience

With a multi-currency payment gateway, your customers can pay directly in their home currency. It makes the checkout process faster and more efficient.

Merchants can settle and hold funds in multiple currencies without having to go through the currency exchange process. They can use the funds to pay suppliers and other contractors in international regions.

Greater security

The technology behind a multi-currency gateway uses advanced security measures to protect payment data. The technology safeguards customers’ data and transaction details. Also, the merchant can use the settlement of currencies to assist in mitigating currency fluctuations.

What to Look for in a Multi-Currency Payment Gateway

The right multi-currency payment gateway can be a game changer for your business. Taking time to find one with the right features can help grow your business across the border and give your customers a better experience. Some of the features you should look for in a good multi-currency payment gateway include;

Multiple currencies and multi-currencies settlement

A multi-currency payment gateway should have all the currency options you need. Check the full list of supported currencies before signing up. If the gateway cannot settle and withdraw payments in your desired currencies, you won’t be able to take full advantage of it.

Opting for multi-currency payment gateways like Pay iO, which covers a wide range of currencies, can help you expand your territories and the countries you can do business in.

Smooth currency exchange

 One of the challenges that merchants and customers face is the fluctuation of currencies between when the transaction is accepted and when it is settled.

This causes the billing to vary, causing what is called an FX risk. You can reduce this risk by using a payment gateway with the right features.

Using a multi-currency payment gateway, merchants can hedge the risk by fixing the rate through the payment provider until the transaction is settled. You can also use the live rate to execute the deal on the same day or moment. These features come in handy in helping to stabilise the prices and provide a smoother experience for customers and merchants.

Multiple billing methods

You should give your customers and suppliers multiple options to pay you. A good global payment gateway supports different billing models like recurring payments, shopping platforms, integrations and invoicing using payment links. Giving multiple billing methods allows your customers and suppliers to choose an option they are more comfortable with, enhancing their experience with your online store or service. 

Fraud protection

Safety and security should be at the forefront of every payment gateway. The threshold for multi-currency payment merchants is even higher. You must meet all the security and regulation requirements before signing up with any provider.

  • PCI compliance – The first standard a global payment gateway must meet is PCI-DDS Compliance. It is a global standard that is managed and enforced by the PCI Security Standards Council.
  • Secure encryption – Any data transmitted through your payment gateway must be encrypted securely. It is vital to prevent account data breaches that could be detrimental to your business and your customers. The global payment gateway should use security features like SSL to encrypt and protect data during transmission.
  • Fraud scrub – When using a multi-currency payment gateway, you inadvertently open your customers to international fraud. A good global payment gateway should provide a fraud scrub security feature that works around the clock to block fraudulent purchases while allowing you to adjust your parameters.

Flexible integration

Your preferred multi-currency gateway should reduce your workload and get up and running in the shortest time possible. It should be convenient and minimise downtime. It should have flexible integration with your existing payment platforms. Some of the features to look out for are low-code options or hosted payment pages that you can add at the click of a button.

Pricing and fees

Finally, you will want to look at the payment gateway’s cost and pricing model. Typically, there are two pricing models associated with multi-currency payment gateways:

  • Interchange++ – This pricing model is common in Europe and North America. The fees associated with processing the payment are separated into three parts; the interchange fee, the scheme fee and the margin you make. The interchange fee goes directly to the bank that issues the payment card, the scheme fee goes to the card providers, and the margin goes to you. Under this scheme, the interchange and scheme fees depend on the type of card used, the banks involved and the countries both parties are in.
  • Blended pricing – This is a simplified version of the Interchange++ pricing. All the associated fees and processing are merged into a single fee. It usually takes a form of a percentage fee plus a small fixed cost per transaction. The blended pricing model means you get a better idea of what you will likely pay for each transaction. It doesn’t vary by bank, card or location like in the Interchange++ model.

Merchants need a multi-currency payment gateway to capitalise on the rising demand for digital products and services across borders. Such a payment gateway localises the checkout experience and minimises the buyer and seller fees.

Fortunately, finding a competent and reliable global multi-currency payment gateway solution shouldn’t be difficult. You can find solutions that provide your customers and suppliers with convenient and affordable checkout experiences tailored to different currencies and markets.

Besides making your accessible to new markets and customers, a multi-currency payment gateway will also help you save money on currency conversion, lower your FX risk and increase flexibility when doing business in multiple currencies worldwide.

Rapid Setup, Web & Mobile Access, FX Exchange

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