Thursday, April 4, 2013

Fraud Detection and Mitigation – Domestic & Abroad

By displaying the prices of products in the currencies of your international customers, you can generate more online sales. If you are targeting Germany, for example, a German cus¬tomer will see prices in Europe. As the price has already been converted for him or her, this customer does not have to mentally attempt to covert US dollars into Euros, making it an easier sale, and also reducing chargebacks.

The simplest way to show customers the price in their local currency is to display the converted price at checkout, after tax and shipping has been calculated so that the customer will see the complete or “fully landed” price. At checkout the payment processor will read the BIN range from the customer’s credit card and determine the appropriate foreign currency in which to dis¬play the price. While this is the more simple option, the downside of only showing the customer the price in their local currency at checkout is that this can lead to lower sales. Customers need to be committed to shop in the merchant’s site, put items in their shopping cart and enter their credit card number to see the cost. This customer experience creates friction. Merchants who use this method need to communicate to their customer that they will see the fully landed price in their local currency at checkout.

To stimulate more sales merchants, it is recommended that you display the prices of goods to online customers in their currency while they are shopping. This can be done in two ways. One option, called dynamic pricing, is for merchants to set a price that fluctuates with the US dollar foreign exchange rate. The benefit here is that the cost of your products will be in US dollars. Dynamic pricing ensures that the sales price covers the cost. The downside is that merchants may end up with some pricing that is not priced competitively in the market or presents some prices that are counter institutive to online shoppers. For example, online customers might find a price in $13.13 US dollars or €13.13 euros to be suspicious and may not want to make the purchase. Merchants who use dynamic pricing won’t be able to control this.

The most customer-friendly means to price products in multiple currencies is to use fixed pricing in the local currency. Merchants can research the local market using comparison shop¬ping engines. Shopzilla and NexTag are free online services that help customers do comparison price shopping online. Once the merchant sets the foreign currency pricing the multi-currency payment processor will collect payments from online customers and convert the sales into US dollars.

Key points:

• Showing foreign currency prices at checkout is simple to imple¬ment but is unlikely to maximize sales. This is because a cus¬tomer puts a product in their shopping cart and adds their credit card number before seeing the price of the product in their local currency.
• To make the most sales display prices in the currency of international visitors while they are shopping.
• The best way to price products in foreign currency is to research the local market using online shopping comparison sites. Mer¬chants can find the market price for their products and set fixed prices in the foreign currency

Click here to learn more.

The 'Selling Overseas' blog series is brought to you by Planet Payment's iPay Gateway, which offers PCI-compliance payment solutions for eCommerce. Currently available in the US and Canada, the gateway enables acceptance of all major payment types and methods, and offers customized solutions that meet each merchant's processing needs.

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