How To Process Payments In Multiple Currencies

These days, finding a SaaS or software business with no global growth ambitions is almost impossible. 

Given the popularity of the business model and the rapid growth rate of international commerce, SaaS businesses are actively seeking ways to reach overseas customers. 

Surely, as you know, to achieve success in this highly competitive market, it’s imperative that you make use of practices that help your SaaS business stand out. 

One way of doing that is by offering shoppers the option to pay for your services or products in their own currency. 

This, of course, is easier said than done because multi-currency payment management is a highly complex process, going well beyond the financial aspect, not to mention the dreaded issues like local taxes or compliance regulations. 

Luckily for SaaS businesses, the Merchant of Record business model can easily take care of these matters and eliminate the existing associated risks.

In this article, we’ll discuss the impact of multi-currency payment processing on SaaS global growth by looking at:

What is Multi-Currency Payment Processing?

The Benefits of Multi-Currency Payment Processing

The Risks of Multi-Currency Payment Processing

Considering Multi-Currency Payments for SaaS

Is the Merchant of Record a Solution?

How Can PayPro Global Help?

What is Multi-Currency Payment Processing?

Multi-currency transaction processing allows SaaS businesses to accept payment in many different foreign currencies. The customer makes the purchase in their own currency, while the SaaS receives the funds in theirs. 

In the context of selling into international markets, multi-currency management is absolutely crucial because it allows businesses to cater to the payment preferences of their global shoppers. 

But, not all SaaS companies are practicing it. So you might be wondering: why not, what’s the catch? 

As advantageous and essential as this process is, there are many details that impact whether or not to go the route of multi-currency payments. Having the ability to handle each one through an all-inclusive solution is ideal for leveraging the true power of this localization best practice. 

The workings of Multi-Currency Payments 

Before we get into the benefits and risks (yes, you read that one right) of multi-currency payment processing, it’s important to have a visual of the process. So, let’s break it down into steps. 

The Benefits of Multi-Currency Payment Processing

Here’s the thing. Being able to offer customers multiple 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. 

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. 

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.

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. 

How Can PayPro Global Help? 

In today’s highly competitive global SaaS industry, you need a solution that can help improve costs and reduce exposure to currency fluctuations, eliminating hidden fees. In the end, a strategic partnership with a robust Merchant of Record infrastructure will allow simplifying the multi-currency payment process, increasing efficiency and cost-effectiveness. 

With over 15 years of experience in the payments industry, PayPro Global’s MOR stands out as the right partner for selling SaaS, software, video games, and digital goods, offering a straightforward route to worldwide success. 

Through smart automation based on IP geolocation, PayPro Global displays the final converted amount in the customer’s local currency in the checkout phase. To eliminate possible currency fluctuations, our automated exchange rate feature locks the rate of the currency at the time of the purchase. 

Additionally, by integrating automated local billing and invoicing, PayPro Global reduces potential errors associated with multiple currency payments and operational hurdles. 

PayPro Global’s MOR seamlessly integrates with your product, ensuring fast time-to-market and seamless customer experiences. With us on your side, you can rest assured that shoppers in all corners of the world are well taken care of.

Operating as your certified PCI-DSS Level One partner, we are committed to achieving and maintaining global compliance, upholding the most rigorous payment security standards. 

Find out more about our all-inclusive solution and how we can help you scale your international business in different markets strategically.