Multi-currency payment gateways: A better way to accept payments globally
Payment gateway technology has been instrumental in enabling eCommerce businesses to grow. They help businesses get up and running quickly and offer a seamless and secure checkout experience. But when it comes to expanding internationally, most payment gateways come with some costly fine print: foreign currency fees.
For one-off payments, this might not be a huge issue. But over time, those fees add up, and they can cripple your business before it’s had a chance to lift off.
But first, let’s define what a payment gateway is. Then, we’ll explore how an international payment solution can help your global eCommerce business expand with higher margins.
What is a payment gateway?
A payment gateway is the technology platform that enables you to accept online payments in your home currency. It’s a secure checkout portal that guides your customers through the steps that allow them to make a payment to your business’ bank account.
Chances are, you’re already familiar with a payment gateway. The portal lets your customers add in their credit or debit card details, enabling a smoother, seamless payment experience, and greater efficiencies than a traditional bank transfer.
But here’s the problem: payment gateway providers typically charge an additional fee for merchants using their platform.
What is a multi-currency payment gateway?
Like most payment gateways, a multi-currency solution lets you accept and make payments through a secure online portal. The big, cost-saving difference is that it provides businesses and users with currency flexibility for global customers. They can choose to make payments in either their home currency or common global currencies, like USD, EUR and GBP.
So for example, for an Australian eCommerce business, a multi-currency payment gateway would enable you to accept payments in USD, and withdraw USD, without being slugged with additional foreign currency transaction fees.
Effectively, it’s an international payment gateway that makes it easier to accept payments from international customers, widen your reach, and grow your customer base.
But be sure to read the fine print…
Confusingly, many platforms that claim to be multi-currency payment gateways don’t actually offer your business this flexibility behind the scenes.
Often, they’ll label themselves as such, purely because they accept lots of international currencies and payment methods. But in practice, they force-convert the currency back to your native currency and charge you a transaction fee on the side.
A true multi-currency payment gateway enables you to settle in multiple currencies. So for example, if your customer pays in GBP, you can settle and withdraw in GBP without being forced to convert to AUD first.
So when looking into the best multi-currency payment gateway for your business, be sure to check that the platform is legit. You don’t want to get caught out.
How does a multi-currency payment gateway work?
Here’s how a multi-currency payment gateway works, in simplified terms.
Your customer decides to make a payment. They head to the checkout on your eCommerce site and get taken to the payment gateway.
They’re asked to enter their credit or debit card details. They enter their details, confirm the payment, and then everything’s completed on their end.
The payment gateway then sends your customer’s card details to your nominated payment processor (typically, your bank) through a secure gateway.
Your bank analyses this information and determines which payment network their card details belong to. This can be either a straightforward EFTPOS network or credit card provider.
The payment then gets routed back to your customer’s bank or credit card provider. These details and payment amounts get authorised, with fraud detection procedures occurring to make sure the payment request is legitimate. Once the payment is authorised, both you and your customer should receive notification that the payment is complete
The payment is then settled—this is where the magic happens. When using a traditional payment gateway, the money will typically go through a forced conversion (usually at your expense) where the sum gets exchanged from its original currency into your receiving currency. With a multi-currency payment gateway, this doesn’t happen. The money goes straight through to your nominated bank account and is held in the received currency.
This is a big plus for businesses dealing with large volumes of international customers. You pay less on conversion fees and get better margins on your income. As an eCommerce business, this can have a big impact on your profit and ability to price competitively.
It’s easier—for everyone
You can settle and hold funds in multiple currencies, without having to go through the currency exchange process. It’s easier to pay your suppliers or marketing costs in international regions. Your customers can pay directly in their home currency, making it a much easier process to purchase from you. And when it’s easier to purchase from you, there’s less friction in making that sale.
It’s more secure for your money
As an international payment gateway, the technology behind it is already secure. But it’s also better for your exchange rate. Settled currencies can be used to hedge against currency fluctuations, meaning you can keep more of your money in your account, without worrying about losing it to the whims of the market.
What to look for in a multi-currency payment gateway
When shopping around for the best multi-currency payment gateway for your business, there are a few key features that you need to look out for.
It should be a given, but a multi-currency gateway is no good if it doesn’t offer the currency options you need. Be sure to check the full list of currency options before signing up with any platform.
Make sure you’re not only able to accept foreign currencies, but settle and withdraw in those currencies too—without sneaky conversion fees.
Multiple billing methods
Give your customers and suppliers more options to pay you. A good multi-currency payment gateway will be able to support multiple billing models, such as recurring payments, shopping platform integrations, and invoicing using payment links.
Make sure your gateway is secure with built-in fraud protection and authentication tools, such as the 3DS fraud engine. This helps to reduce chargebacks and increase the acceptance rate of payments.
You want your payment gateway to reduce your workload and get you up and running faster. So make sure it offers flexible integration with your existing payment platforms. Things like low-code options to integrate into your website, or hosted payment pages at the click of a button.
Pricing & Fees
There are typically two pricing models associated with multi-currency payment gateways: interchange++ and blended pricing.
Interchange++ is a type of pricing commonly used in North America and Europe. Under this model, the fees associated with processing the payment are separated into three parts: the interchange fee, the scheme fee, and the margin you make.
The interchange fee goes directly to the bank that issues the payment card. According to the RBA, the current average interchange fee is around 0.5%, so expect to pay around that amount.
The scheme fee goes to the card provider. Current Mastercard rates can be anywhere from 0.18% to 0.80%, plus GST.
The margin goes to you. This is typically what you, as the merchant, add on to the payment in order to cover the other associated fees.
The interchange and scheme fees will depend on the type of card used, the banks involved, and the country both parties are in.
Blended pricing is a simplified version of interchange++ pricing, where all the associated fees and processing are merged into one simple fee. This usually takes the form of a percentage fee, plus a small set dollar fee per transaction. So for example, you may expect to pay 1.8% plus a $0.30 or 0.60 transaction fee.
The blended pricing model means you get a better idea of what fees you’re likely to pay each transaction, as it’s not reliant on individual bank or card pricing models
A note on forced currency conversions
When using a standard payment gateway, you may also be required to pay fees on forced currency conversions when settling funds in the available currency. They typically incur an additional percentage fee on top of your payment gateway provider’s fees. And that’s not all: you’re also being exposed to your bank’s poor FX rate. This is usually hidden, so you may not know what the real conversion rate is.
These forced conversions may seem part and parcel of international transactions—but they don’t have to be.
Airwallex provides a better multi-currency payment gateway solution
When you open an Airwallex account, you’re furnished with an Airwallex Wallet which enables you to send and receive funds in international currencies. These currencies settle into your wallet without the unnecessary conversions, enabling you to avoid costly FX fees.
You also get access to a Global Business Account. This acts as your multi-currency business account through which you can hold, manage, and make direct payments to your international suppliers. It’s a complete, end-to-end solution across 7 major international currencies, including USD, EUR, and GBP, which means you can say goodbye to unnecessary conversion fees on your settlement and payments.
How you integrate your Global Business Account into your payment gateway is up to you, with five flavours of online payments to choose from:
A simple ‘plug and play’ payment acceptance extension for WooCommerce and Magento eCommerce websites.
A hosted payments page, which provides a seamless one-click experience that takes your customers directly to your Airwallex-hosted checkout page.
A drop-in option, where you can build your payment page and let us host it for you.
Flexible embedded fields for each Airwallex payment option.
An Online Payments API that gives you full control in building your own checkout experience.
Related article: The best payment gateways for international eCommerce
Stripe vs Airwallex: compare on fees, features and benefits