SiteSpect, a personalization platform, helped retailer B&H Photo respond to currency conversion questions and increase subscribers to its daily-deal emails.
The payment processing vendor’s currency conversion service helps retailers expand internationally.
A new currency conversion service from First Data Corp. aims to make it easier for e-retailers to give consumers paying with foreign currencies accurate order totals at the time they place an order and creates an additional revenue stream for merchants.
The payment processing vendor says its Dynamic Currency Conversion service, which it is offering in partnership with payments specialist AJB Software Design Inc., eliminates the lag time that exists currently for foreign credit card payments, as consumers typically only get a final read on what the purchase cost them when they see their monthly credit card statements.
“With global marketplaces available to us all at any given moment and retailers’ inherent desires to push their retail presence into new regions of the world—particularly for those who have saturated a particular geography—currency issues remain one of largest gating factors,” says Steve Rowan, an analyst at research and advisory firm Retail Systems Research LLC. “Any technology that enables shoppers to purchase across borders or currencies with an increased level of confidence is going to be highly attractive to retailers.”
The Dynamic Currency Conversion service works with online and store payment systems. When a customer begins to check out with a credit card online or in a store, the service immediately checks if it works with the card’s associated currency. If it does, the consumer will see an option to complete the transaction in either the local currency or the one associated with the card, along with both prices and the current exchange rate. The service can accept more than 70 foreign currencies at this time, says Michael Black, Jr., vice president of international currency solutions at First Data.
The timing aspect is key. When left up to credit card issuers, the final payment as reflected on a customer’s monthly statement may not use the exchange rate in effect at the time of transaction, as issuers are allowed to apply an exchange rate available at any point in the billing cycle. Card issuers can also tack on up to 7% of the total transaction cost in foreign transaction fees, although the average fees are 3% for bank-issued cards and 1% for credit cards issued by credit unions, according to the Pew Safe Credit Cards Project. These fees and varied exchange rates can change the price foreign customers from what the shopper thinks she is paying for a purchase.
First Data says that with the Dynamic Currency Conversion service, the conversion is made at the current exchange rate and a portion of the foreign transaction fees get paid to the retailer instead of the credit card company, so the retailer gains revenue each time a customer converts currency in a transaction. The portion varies from merchant to merchant, depending on their individual contracts with First Data, the company says.
First Data is one of the world’s largest payment processors, handling payments from 6.2 million merchant locations worldwide and generating 2011 revenue of $10.7 billion.
Fareed Zakaria, host of international affairs program Fareed Zakaria GPS on CNN, will be giving a keynote address at the 2012 Internet Retailer Conference & Exhibition in Chicago this June in a talk titled, “How e-commerce mastery will drive the global economy.”