Accepting International Credit Cards

Given the globalization of the world economy and the reach of the World Wide Web, many merchants have widened their customer reach by selling products beyond their national borders. In the past, processing in foreign countries posed many challenges including website management, marketing, fraud, pricing management, currency conversion & reconciliation, foreign exchange risk and a general lack of knowledge of how to effectively conduct business. Fortunately, the card Associations, many processors and some forward-thinking technology companies have made it easier than ever to process overseas.

Accepting international customers means accepting credit cards issued outside of your country. Setting aside the mechanical aspects of processing, merchants should strongly consider the benefits of allowing customers to pay in their native currencies, as research has long shown, consumer prefer to shop and purchase in the currency of their native country. Sale conversion rates are the biggest benefit of multi-currency support. Research has also shown that conversion rates jump between 30% and 50% when customers are allowed to purchase using their own currency. After all, it is much easier to gage the value of a product in one’s own currency. What’s more, many sites tend to underestimate the volume of international traffic they have.

To understand international processing, one has to simply grasp the concept that each country – or group of countries in the case of the European Union (EU) – has its own currencies and sets of interchange rates. The basic models governing international processing deal with the conversion of currencies and the fees associated with the transactions. There are three basic models. Because Payments-R-us is US-based, we will look at the models from the perspective of the U.S. dollar (USD). It is important to point out that in general these models work the same regardless of your native currency.