E4X is selling online currency conversion to global sellers.
Tne obstacle to global selling online is currency conversion. Online buyers like to know the price in their own currency and online retailers don’t usually like to be at the mercy of currency fluctuations.
Enter E4X Inc., a New York-based online currency exchange company that has started rolling out its product after several months of beta testing.
Software that retailers install on their servers converts U.S. currency to any foreign currency and displays the price to local users in their own currency.
Yuval Tal, CEO, says the system eliminates currency fluctuations for retailers. E4X takes the risk of currency conversion by hedging the price with a major trading bank. Most retailers would have a hard time hedging themselves because banks don’t usually hedge amounts of less than $1 million, Tal says. E4X will aggregate currency conversions to reach the minimum.
While the U.S. will continue to lead in online sales for some time, tapping the global market could be important to the success of online retailers, says Jupiter Media Metrix. The European market alone will account for $62 billion in online shopping in 2005, up nearly tenfold from last year’s $7 billion, Jupiter says. Some researchers put the amount even higher.
While no retailers are using the system yet, E4X’s customers include travel packager Tourico Holiday Flights, a Maitland, Fla.-based seller of tour packages to travel agents around the world. “It gives us a tremendous competitive advantage for a customer to see the site in their own language and book the travel in their own currency,” says Amir Kalmar, director of sales. In addition, relying on a third-party to handle the currency conversion will save as much as 5% on overhead costs, he says.
Kalmar says Tourico will heavily promote the local currency aspect of its services to travel agents at major trade shows starting this month at the POW Wow USA show in Orlando. It also will promote it to the 5,000 members of its e-mail marketing data base and through trade press advertising. “We will showcase it big time,” he says.
Kalmar says Tourico was unable to find any other such currency conversion services for web sales. Says Tal: “As simple as it sounds, it did not exist until recently.”