Step Three: The customer selects the preferred payment method.
Step Four: The customer provides their payment details.
Step Five: The payment is processed in the currency selected. Behind the scenes, multi-processing transactions require extensive communication between banks and other financial gateways to obtain transaction authorization.
The Benefits of Multi-Currency Payment Processing
Here’s the thing. Being able to offer customers multiple vietnam whatsapp number data currencies and payment options is the core element of a fast global expansion strategy.
If you’re looking to go beyond borders and tap into global audiences, it goes without saying that having effective multi-currency management is key.
3 Advantages of Processing Payments in Multiple Currencies
Now, let’s look at what you have to gain from it:
Greater international payment flexibility
As mentioned earlier, multi-currency transactions are an integral part of your brand’s localization strategies. The success of your international expansion depends greatly on how well your SaaS business can accommodate the payment preferences of customers from different regions.
Having the option to pay in their own currency can undoubtedly lead to increased conversion rates and boosted brand reliability, both of which translate to greater revenue.
Better Checkout Experiences
It probably goes without saying that it’s important to ensure that the entire purchasing process is frictionless and smooth. But the more hurdles your customers face, the lower your conversion rates will be.
With multi-currency payment processing set in place, you can deliver convenient customer experiences, allowing shoppers to pay in their local currency instead of a foreign one, which is subject to fluctuating exchange rates. Take the Brazilian SaaS market. The more eager you are to respond to local consumer payment preferences, the higher your conversion rate can be.
Merchants that allow customers to pay in their currency avoid the confusion surrounding cross-border payments, which causes customer confusion about whether or not they are making a good deal.
Increased Payment Processing Speed
You want to get paid fast, right? Of course, you do, who doesn’t? And with multi-currency payments, you can do just that.
Cross-border transactions tend to be slower than domestic ones in terms of payment processing speed. But, by applying a multi currency solution, you gain increased speed due to the involvement of local payment networks.
The Risks of Multi-Currency Payment Processing
While multi-currency payment processing might sleep like a slam dunk based on what we have discussed so far, the issues associated with risk cannot be ignored.
Something so beneficial for business growth surely couldn’t have a downside, could it?
Unfortunately, it does.
Like with everything else in the financial landscape, there are several risks involved, and the only way to fully overcome them is to work with the right partner, in this particular case, the Merchant of Record solution. But we’ll get to that soon.
For now, let’s focus on the challenges of multi-currency payment management.
4 Risks Involved in Processing Payments Across Multiple Currencies
Operational Hurdles
Selling internationally is a complex endeavor by default, but when you add multi-currency management to the formula, things can get really tangled and messy.
There are so many different processes involved, such as currency conversion, payment reconciliations, and accounting enhancements, all of which are region-dependent.
In other words, should you wish to adequately respond to different payment preferences belonging to shoppers across the world, you need to seriously consider the local rules and regulations impacting international payments.
Ensuring compliance with different taxation and payment rules like anti-money laundering (AML) and know-your-customer (KYC) requirements, and even recurring revenue regulations, can easily bury your team in a heavy workload that takes you away from what matters most: your product.
Plus, multi-currency management loses its strategic advantage when you are the one trying to figure out regulatory compliance, one country at a time.
More Payment Failures
One of the biggest metrics SaaS businesses should be concerned with when expanding globally is the authorization rate. The lower this rate is, the more revenue you are losing.
The problem with multi-currency payments, as well as cross-border transactions in general, is the increased level of scrutiny they face.
In other words, an international transaction has a higher chance of rejection by banks due to either fraud or compliance concerns than a domestic one.
Unless you have a dedicated partner who can provide you access to a robust infrastructure proven to boost your approval rates and protect legitimate transactions, this particular challenge will have a significant impact on your profit margins.
Complex Business Relationships
SaaS businesses operating on their own need to establish strong business relationships with international financial institutions, such as foreign banks or payment processors, to accept payments and support multiple currencies, each with its own set of protocols and fees.
That is a heavy time and resource-consuming process, and no stranger to potential risks like miscommunications due to language barriers.
Risk Management
One of the challenges of multi-currency payment processing is the market volatility.
With up and down swings, market volatility affects your potential revenue and risk.
Currency fluctuations can reduce the final amount left from your international transactions.
Moreover, security concerns are considerably higher in foreign payments than in domestic ones. There are multiple and diverse fraudulent attempts that exploit system weaknesses in the payment process. So it’s important to invest in achieving and maintaining high financial security levels.
Considering Multi-Currency Payments for SaaS
Looking at the list of benefits and comparing it with the risks and challenges, you might be wondering whether or not multi-currency payment processing is something you really want to offer.
You might even be inclined to say no.
However, multi-currency payment processing gives you the biggest advantage of all: increased market accessibility.
It is one of the pillars of payment localization, a strategy that can enhance customer satisfaction, experience, and conversion rates.
Capitalizing on global opportunities and gaining a real competitive edge depends on your SaaS business having multi-currency management correctly implemented.
And that’s the keyword here.
Protecting your business from currency exchange risks revolves around your payment partner and their technology and expertise. But it all has to be done correctly.
Is the Merchant of Record a Solution?
So far, we’ve established that multi-currency payment processing is crucial but complex and often difficult to manage. That is if you decide to carry this burden exclusively without the help of experts.
Benefits of using merchant of record
If you approach it from a different angle, that of a strong partnership with the Merchant of Record business model, the situation is completely transformed. Here is how:
Payment Flexibility
Acting as your reseller, the Merchant of Record business model has a robust payment infrastructure in place that simplifies payment acceptance in different currencies. This way, your customers experience less friction, enjoying a seamless payment experience, and you grow your SaaS business internationally, boosting the number of transactions.
Plus, partnering with the MOR business model alleviates the need to set up local business entities in the regions you plan on expanding in. The MOR infrastructure has everything set in place to fast-track your global expansion.
Operational Efficiency
Complex international tax and regulatory compliance rules and administrative processes, fraud protection, and chargeback management make multi-currency payment processing a real hassle.
With a Merchant of Record partnership, these hurdles don’t exist. Your reseller achieves and remains compliant, and you benefit from their years of experience. The payment data of your global customers is carefully stored and protected.
You can effectively protect your SaaS business from penalties, fines, and increased operational burdens and costs because the MOR takes on the liability shift.
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Your Dedicated eCommerce Partner.
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