However, the payment provider may not offer that capability, or perhaps you opted not to begin with that capability because it would take longer and cost more to implement. In this instance, what makes more sense is to offer an actual currency conversion and then charge an international fee. The typical process here is that the bank performs the currency conversion and the end users are going to be charged a small extra fee for the service. Customers will probably be accustomed to this and will expect a currency conversion fee in many cases, but it's still not an ideal solution. It’s clearly preferred to provide a more seamless and robust capability of processing payments in multiple different currencies.
Another thing to consider is appropriate data configuration so that the pricing information represents the currency-specific costs, sale price, base listing price or other factors, across all of the different currency offerings. The multiplier in the exchange rate should also be kept up to date and reflect correctly on the price. In addition, maybe a margin for customs and duties should be placed, or another kind of buffer is necessarily applied because the exchange rates are not updated frequently enough.
It becomes obvious how the optimal scenario involves a highly seamless procedure. But in reality, sometimes it's not possible to handle all currencies directly on the international eCommerce site via the payment processor. As you can imagine that functionality requires a sophisticated and well-structured initial setup to operate effectively.
A possible approach is to gradually phase into the desired scenario where everything is seamless and tightly integrated. This could be accomplished by starting out with a conversion rate and perhaps a small fee, while making sure the end user is made aware of the fact accordingly.
There could be a particular market -or markets- where it makes sense to initiate business with the direct currency purchasing functionality. While strongly encouraged, it’s simultaneously time-consuming to validate, test and work with the payment provider to process payments for each different currency.
The final option is to set up some form of representative digital currency. As mentioned above, this could be actual digital currency that has to be purchased and converted from the local currency beforehand; or it could be bought in a strongly integrated way, by getting purchased behind the scenes in a seamless fashion. Alternatively, instead of an official external digital currency, the payment method could literally be just a token or point system within the application.
In other words, each item available for sale in the application isn’t represented as a specific currency, but as a token amount instead. The currency conversion would be from the local currency to the specified token amount. The drawback of this approach is how it frequently creates confusion for the end users, hindering their ability to understand what the token amount is actually worth in real money.
This problem can be easily overcome by showing the selected currency amount alongside the token value. The idea of a token system can be really helpful, especially with a diverse pool of users (buyers or sellers) of the platform, who trade in different currencies. A token system can also avoid the substantial logistical overhead with multiple active currencies and attempts to process them through payment providers. The exchange rate or logistical issues surrounding the setup of excessive payment providers can be noticeably reduced by a token system.
The best solution for your eCommerce application depends on a number of factors. During the early phase of initiating international eCommerce, all options are acceptable. As a business continues to grow and build an international eCommerce presence, it makes sense to leverage multi-currency for enhanced integrations that literally push the payments directly to the payment provider in each local currency. Choosing this option from the beginning can result in excessive overhead, so we encourage starting small and then iteratively growing into more complex and streamlined offerings.