A multi-currency merchant account allows a merchant to accept payments in multiple currencies and currencies other than his home currency. This can be an excellent advantage in the given scenario of globalization which has provided an internet merchant access to a global market for his or her products. With a multi currency account, a retailer can provide the customer the ability to pay in their own currency, while still receiving remittances in the home currency. In case an international merchant account is used, a number of different currencies are available to the merchant in which to settle funds. For instance, a buyer in New Zealand can buy products from a US merchant and still pay for it in New Zealand dollars. At the same time, the US online merchant will receive remittances in US dollars.

Any e-business today will be hard pressed to survive without international sales or an online presence. People in major emerging economies such India and China are increasingly interested in products from developed countries such as the US and the UK, as these countries are renowned for their high quality, which is often not available in developing nations. However, as is the case with many of these countries, the government imposes a restriction on currency exchange and their own home currencies are not freely convertible. By offering a multi-currency option, an e-merchant can not only gain a wider market access, but also gain a competitive edge in the e-tailing marketplace. An added benefit with some merchant account providers who have multi-currency capabilities is that they are able to provide localized web pages in the reader’s language that makes it even more user friendly.

There are many merchant account providers out there who offer to credit card acceptance in most global currencies, sometimes ranging from 120 to170 currencies around the world. It is important to note, however, that for the merchant, the currencies in which funds are made available finally, are more limited to the better known currencies, usually 15 major global currencies including UK Pound Sterling, US Dollars, Euro, Canadian Dollar, Japanese Yen, Swiss Francs and Australian Dollar. Foreign exchange rates are provided daily by the merchant account provider. The multi currency merchant account provider will indicate currencies on the monthly account statement.

While it is obviously beneficial to provide multi currency facilities, it does not come free, and adding more currencies will increase both monthly maintenance fees as well as monthly and set up fees. Some provides will usually provide a default currency at no additional charge and an incremental fee for each progressive currency added. In addition to the wider market access that comes with multi-currency acceptance, an online merchant may choose to maintain multiple accounts for each different currency. For instance, if an US based online merchant receives several orders from the UK, it may be wise to set up a separate Pound Sterling account offshore to maintain funds in the same currency. Conversion charges can be saved significantly using this technique, and many e-tailers opt for it. This insulates them substantially from currency exchange rate fluctuations.

While multi-currency merchant accounts increases market access available to an online merchant, it also increases exposure to credit card fraud, especially since the foreign buyer is not regulated,  and in case of a problem, the local government may not be able to provide any suitable protection. According to a survey conduct by the Merchant Risk Council, online credit card fraud causes losses of upto USD 50 million each year. In most cases, credit card fraud originates from the less developed nations, primarily the following (actual rankings differ as per different surveys):

The Ukraine
Indonesia
Yugoslavia
Lithuania
Egypt
Romania
Bulgaria
Turkey
Russia
Pakistan
Malaysia
Israel
Venezuela

In order to minimize potential losses due to such fraud, it is important for an online merchant to ensure that the merchant account provider has taken the necessary steps in terms of verification, particularly fraud scrubbing. In addition to CVV and AVS verification, a good fraud scrubbing software can be instrumental in weeding out potentially loss making sales. However, the merchant must remember that the process is not perfect, and it is likely that along with fraudulent transactions, a small percentage of legitimate sales may also be lost.

For more information on multi-currency merchant accounts.   please visit www.stradafee.com!