It’s a toss-up whether foreign languages or foreign currencies pose the biggest problems in international e-commerce.
Just as there are many languages in the world, there are many currencies, along with many systems of sales tax and other accounting bits that have to be taken into consideration by any online sales effort. True — you can post prices on your site only in dollars to circumvent many issues (or pounds or marks or whatever .) But our research shows that many customers flat out refuse to buy when they are not sure of the exact amount of the purchase.
In other words, if you give buying information only in dollars when your would-be buyers are accustomed to thinking in drachmas, it’s a sure bet that you’re losing sales.
There are a number of solutions, some of which are quite simple. The simplest solution may be to add an interactive currency calculator to your site. It’s sort of the least you can do but it’s better than nothing.
It’s better because even though it won’t calculate local sales tax, it will at least give the foreign shopper an idea of how much your product might cost and offer a clue whether it’s worth pursuing or not. In many cases, products are so much cheaper in certain countries, like the US, that even with taxes, shipping and duty, the foreign customer may decide to buy regardless.
Better solutions include payment systems that not only perform the currency calculations, but also calculate the VAT (value-added-tax or sales tax) by country and product category. Doing so gives the shopper a true idea of the value of the purchase. The best systems automatically update the currency conversion and tax rates (so the e-commerce site owner doesn’t have to) and can be used with any payment systems on the market.
An example of a multi-currency payment systems is WorldPay, launched in the U.S. WorldPay lets you offer your products or services in more than 100 currencies and allows you to receive payment in any one of 16 prime currencies. (Course, the number will be down to six when the Euro takes over.)
With such services, your prospects and customers can buy in a currency that’s familiar to them, where they can see the real value of your product or service relative to what they can find in local stores.
In addition, having the exchange rate updated on a daily basis means the customer will know what s/he will be paying. The alternative may be a rather nasty surprise on the credit card statement, following which s/he might write you a nasty letter (in a language you don’t understand) to dispute the bill. The dispute involves a stop payment order which you do understand in any language!
With systems that give prices in current rates, the French customer will see what his French Visa card will be charged in Francs. And as an American merchant, you will receive the same in dollars to your account, just as, if you were a British merchant, you’d receive the equivalent amount in sterling.
Sounds simple, which it is — I think of it like simultaneous translation — but it’s surprising that such a simple solution is not used on more web sites. A second, simple solution to facilitate sales to foreign customers comes from a company like Taxware. Taxware offers a solution that computes the appropriate sales tax for a purchase based on geography and the type of item; it even makes up management reports for the tax authorities.
These two solutions combined show the local currency sales amount and local taxes, which makes it easier for the international customer to make a purchase decision while on your site. Why? Because he or she is now enabled to see in familiar terms, the value that you offer.
After all, the web is about convenience. The most clever international internet marketers know that the key to all success is anticipating the customer’s needs and making it easier for him to spend his hard-earned sterling, francs, dollars or drachma on their e-commerce sites.