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Just as we’re naturally more inclined to connect with people who speak our language, today’s shoppers are far more likely to engage with brands that speak the language of their country, their currency, and their culture.
In a global marketplace, it’s not enough to offer international shipping. Brands need to create a payment experience that feels local and familiar to customers worldwide. That’s where international payment solutions and features like multi-currency pricing come in.
By allowing merchants to present prices in a customer’s local currency, support their preferred payment methods, and localise the entire checkout journey, these solutions enable businesses to meet global customers on their terms and build the kind of trust that drives conversions and long-term growth.
This article explores the benefits of international payment solutions and why they’re essential for businesses to thrive in today’s global economy. Keep reading to discover everything you need to know about selling across borders with a local mindset.
What are cross-border payments?
Cross-border payments are transactions where the payer and the recipient are located in different countries, often involving converting one currency to another. Cross-border payments can cover anything from international trade to remittances, tourism and travel, and purchasing assets in a foreign country. For this article, we will focus on cross-border payments for e-commerce.
Unsurprisingly, consumer behaviour favors online shopping, and cross-border payments enable merchants to sell their products to customers outside of their country. This often happens through multi-currency pricing, which allows consumers to shop in their home currency, building trust and creating a seamless user experience.
For example, an online clothing store in the U.S. can sell to customers in the EU by accepting cross-border payments. When the merchant activates multi-currency pricing, customers in the EU can shop in euros while the merchant still receives US dollars at the end of the transaction.
This is generally handled by a payment processor who controls the FX, or foreign exchange rates, ultimately determining how much the money changes through currency conversion. In this case, the payment processor would convert euros to dollars and pay out the merchant in USD.
Unlock extra revenue from FX margins
Key players in cross-border payments
To understand how cross-border payments work, it’s essential to have a handle on the main actors and their roles in the process.
Here’s a quick breakdown:
- Merchants sell products or services and set product prices in their own currency, often with a multi-currency option.
- Customers make a purchase from a merchant in another country and initiate payment in their home currency, using preferred payment methods. Customers expect a seamless checkout experience in their native language and home currency.
- Issuing banks authorise transactions and convert currency before debiting a customer’s account.
- Acquiring banks receive payments and work with payment service providers to process transactions. Acquiring banks credit a merchant’s account in their preferred currency.
- Card networks like Visa and Mastercard route transaction data between the issuing and acquiring banks.
- Payment Service Providers (PSPs) are intermediaries that process payments, offer multi-currency support, and handle FX conversion for merchants. Understanding PSPs is essential to have a good grasp of cross-border payments since they’re the link between merchants, banks, and card networks, which enable multi-currency pricing.
Examples include Stripe, PayPal, and us over here at Planet. PSPs are crucial for assisting merchants with local acquisition, which can reduce costs and increase conversions.
Challenges faced in traditional cross-border payments
Traditional cross-border payments can create all sorts of headaches, both on the merchant and customer side. This is especially true in e-commerce scenarios where the merchant may want to sell internationally but does not have the infrastructure to support multi-currency pricing. These are some common challenges in cross-border payments to be aware of.
1. Hidden FX fees
Let’s say a merchant in the United States is selling internationally but without multi-currency pricing. A customer in the EU may visit the website and see the price of a product in U.S. dollars. When they add the product to their cart and check out, they may be faced with a surprise FX fee tacked on at the end as a separate charge.
This may happen because the exchange rate isn’t shown to the customer initially, resulting in a markup at the time of checkout. But it can also manifest as additional FX or foreign transaction fees on the customer side, which can be anywhere between 1-3%, charged by the card issuer or PSP after purchase.
The implications of this are clear: if the customer sees one price but ends up paying another at checkout, they may feel misled, damaging brand trust and decreasing customer satisfaction. Even if the customer goes through with the purchase, they’re unlikely to shop with the merchant again.
2. Lack of currency transparency
In some cases, customers are not shown the total price in their home currency at checkout. They simply complete the purchase in the merchant’s currency. This places the exchange burden on the customer, who must do the calculations themselves to figure out the total cost of the product in their home currency. The customer is also responsible for factoring in potential bank or FX fees, which can lead to hesitation when completing the purchase, especially for high-value items.
A lack of currency transparency on the merchant side leads to lower conversion rates, higher cart abandonment, and the chance that customers shop with local competitors who sell in their home currency instead.
3. Checkout friction and cart abandonment
Most people shop online for a simple purchasing experience. I mean, who doesn’t love minimal human interaction these days? However, cross-border payments can create extra steps, confusing pricing, and unfamiliar payment methods for customers, which slows down the checkout process and increases cart abandonment.
This is especially true when customers are faced with surprises later, like a lack of localised payment options and unexpected taxes or fees. This leads customers to hop over to competitors who offer a smoother experience, which means lost sales and reduced customer lifetime value on the merchant side.
4. Inconsistent pricing across currencies
Finally, when products or services are shown in different currencies, it may not reflect consistent value due to fixed conversion rates, manual pricing strategies, or rounding errors. For example, a merchant in the USA may create separate pricing for EU customers that’s calculated manually rather than on demand with the ever-fluctuating FX rate.
Customers notice these pricing discrepancies, and it creates the impression of unfairness – why would a customer in the EU pay more for the same product as someone in the USA? For merchants, this can be a significant competitive disadvantage in global markets and creates friction with international sales planning and marketing efforts.
Why international payment solutions are the answer?
International payment solutions are tools that enable businesses to accept, process, convert, and settle payments across different countries and currencies.
Key features of international payment solutions include:
- Multi-currency processing
- FX and currency conversion services
- Global acquiring by processing payments through local banks
- Fraud prevention and compliance tools
- Payment facilitation across multiple regions and providers
International payment solutions were explicitly designed to mitigate the challenges associated with global transactions. They assist merchants in overcoming hidden fees, lack of currency transparency, checkout friction, and inconsistent pricing by offering infrastructure that is:
Localised: International payment solutions allow businesses to accept local currencies and preferred payment methods.
Transparent: See real-time FX rates and fees for no surprises on the customer or business side.
Efficient: Speed up settlements and reduce manual effort.
Flexible: Support dynamic pricing and currency conversion to allow customers to shop in a way that makes the most sense to them.
These solutions are typically offered by payment service providers (PSPs) or banks and acquiring institutions.
The benefit of opting for a PSP as an international payment solution is that it centralises all of the processes and creates a scalable system for global e-commerce.
In addition to multi-currency pricing, currency conversion, and transaction routing, PSPs manage compliance for businesses, create a localised checkout experience for customers, and handle the settlement process, paying out in the merchant’s preferred currency.
You can essentially think of PSPs as the link between the merchant’s storefront and global consumers. They allow businesses to sell internationally without needing to build a custom payment system to handle cross-border transactions.
Overall, international payment solutions simplify global e-commerce for both merchants and consumers by making cross-border payments feel just as easy as local ones.
What is Multi Currency Pricing (MCP)?: A streamlined way to go global
Multi-currency pricing (MCP) is a feature of many international payment solutions like Planet, which creates a centralised method of showing consumers prices in their home currency while still settling funds in the merchant’s currency. This gives the impression of a local shopping experience for customers while the business is still completing a cross-border transaction.
In e-commerce settings, Planet’s MCP creates a simple, personalised shopping process that builds trust with customers and increases conversions on the merchant side. The process looks something like this:
A customer from the EU visits a merchant’s online US store.
The website detects that the customer is visiting from outside the US and updates the website to reflect the consumer’s local preferences. This means that the customer sees prices in euros instead of US dollars, and the language may be updated as well, depending on the country and determined by the customer’s IP address, browser language settings, or via a manual selection dropdown on the business’s website.
At checkout, the customer pays for the product in euros with full transparency on the exchange rate. When utilizing an MCP-enabled PSP, merchants can even offer popular local payment methods, creating an even more seamless checkout experience.
The payment is then converted in real time based on the current FX rate, and the merchant receives the final settlement in USD (their preferred currency).
The process is simple and efficient, taking the conversion burden away from the merchant and placing it on the payment service provider (PSP). In addition to localisation and FX conversion, PSPs offer back-end reporting and reconciliation for businesses.
Customer benefits of multi-currency pricing (MCP)
There are far-reaching benefits on the customer side of multi-currency pricing, which include localised currency and language, transparent FX rates, and consistent pricing across the board. Here’s a more in-depth look at the benefits:
1. See pricing in their own currency
Through MCP, customers are able to view product prices and pay in their local currency instead of the merchant’s. Consumers no longer need to calculate how much they’re spending, which makes the shopping experience feel much more local, familiar, and user-friendly.
Beyond the convenience, it also increases confidence in pricing and reduces hesitation to purchase, translating to higher trust, fewer abandoned carts, and smoother purchasing decisions. It makes total sense – if you know what you’re paying up front, you’re much more likely to complete the transaction versus if you’re unsure what the total cost is.
2. Trust through language localisation
MCP tools often integrate with local language detection, automatically translating business product details, checkout instructions, error messages, and payment confirmations.
When consumers are able to shop in their native language, it builds credibility and comfort during key decision-making moments. Language localisation reduces misunderstandings about product details, shipping, taxes, and return policies, which gives customers confidence in their purchase and makes the brand feel more globally aware and customer-focused.
Plus, if a customer can shop in their own language and they’re happy with the purchase, they’re more likely to recommend the brand to others.
3. No FX surprises during checkout and refunds
MCPs offer real-time currency conversion and upfront FX rates, which means that the live rates are applied to customer transactions on the merchant’s website. The customer always sees the exact price they will pay in their own currency, with FX fees disclosed at checkout for full transparency.
This builds trust and increases conversions, as well as eliminates surprises on bank statements for customers. No more hidden foreign transaction fees or post-purchase rate changes. By providing accurate, consistent pricing across global markets, customers have faith in the business that they are getting the best deal, not an FX rate markup.
This is also applicable when it comes to refunds since MCPs allow merchants to issue refunds in the same currency and the same amount the customer paid, even if the rate shifts. This reduces disputes and confusion and leads to stronger post-purchase trust. Just think about this one logically – would you ever make a repeat purchase from a brand that charged you a premium for a refund? I don’t think so.
4. Consistent pricing from browsing to purchase
When MCP isn’t enabled, a customer may see one price while browsing and another one at checkout when the FX rate and fees have been applied. However, through leveraging MCP, customers see the same price throughout the entire buying journey, from the product page to the cart to the final checkout.
This prevents cart abandonment caused by unexpected currency switches at checkout and reinforces a sense of stability and fairness, leading to confident purchasing decisions.
Overall, multi-currency pricing creates a significantly better shopping experience on the customer side that encourages repeat purchases and brand trust.
Merchant benefits of an international payment solution
Using an international payment solution offers merchants a smarter, more streamlined way to manage global transactions. From improving customer experience to simplifying operations and increasing revenue, the right international payment system unlocks a range of strategic benefits for businesses of all sizes interested in breaking into the global market.
Here’s a closer look:
1. Sell globally with localised pricing
You may be catching on to a central theme here: International payment solutions allow merchants to display their products in the local currencies of their customers, using a real-time exchange rate, all while managing prices centrally in the merchant’s home currency.
This leads brands to have a local look and feel for international shoppers while building trust and familiarity through leaning into native currency. Ultimately, this increases global sales on the merchant side and fosters stronger customer relations across international markets.
2. Receive settlements in home currency without FX risk
While MCP allows businesses to sell in various currencies (135+ currency options available through Planet’s MCP), merchants are still always paid in their chosen settlement currency.
So, even if an American business is selling to customers in the EU, the merchant is still able to receive U.S. dollars at the end of the day, eliminating the need for multi-currency bank accounts or manual conversions with each purchase. Say adios to FX headaches and hello to simplified settlements, especially since PSPs like Planet absorb FX risk, even when it comes to refunds.
3. Reduce cart abandonment and boost conversions
There’s no bigger nightmare for a business than customers consistently browsing, choosing products, and then abandoning their cart before making a purchase. However, with international payment solutions, merchants can provide consumers with a localised checkout experience leaning into local payment methods and the customer’s native language to build trust and encourage purchasing behavior.
By reducing surprises on the consumer side, like unexpected FX fees, merchants can provide a frictionless checkout experience that results in higher conversion rates and, ultimately, greater revenue for the business.
4. Earn commission on MCP transactions
Multi-currency transactions offer a win-win for both the customer and the merchant. Customers get a familiar shopping experience with their preferred currency, language, and payment methods, while merchants receive commission from every currency conversion that happens through MCP.
This unlocks a new revenue stream for merchants, which can help offset payment processing fees. What business would pass up an additional source of income?
5. Simplified expansion into new markets
International payment solutions do more than just offer localised pricing, language, and payment methods. They also assist merchants with:
- Regional compliance and regulations
- Minimising the risk of selling in foreign markets
- Cutting out the need for multi-currency bank accounts
- Significantly reducing legal headaches of operating across borders
A business that uses international payment solutions is able to launch faster across new regions, leading to rapid, cost-efficient global growth without the traditional red tape that comes with launching a business in a foreign market, like complex setups and a high upfront investment.
Grow fast and securely with an all-in-one international payment solution like Planet.
How MCP enhances the end-to-end payment experience anywhere in the world
Multi-currency pricing has transformed the global payment experience by localising pricing, simplifying operations, and increasing transparency. Aside from enabling businesses to offer a familiar shopping experience to customers around the world, it also allows merchants to maintain full control and clarity on the back end.
This comes through in:
Effortless customer experience across channels – With localised pricing and native language, customers can pay in their home currency with real-time FX rate transparency. It also creates a streamlined experience across various touchpoints, from mobile browsing to desktop checkout and even in-store purchases. MCP enables consistent pricing and a dependable user experience, leading to more completed purchases, higher customer satisfaction, and stronger brand loyalty.
Simplified merchant operations and compliance – Through home-currency settlements and automatic currency conversion, merchants can spend less time managing FX rates and foreign bank accounts and more time focusing on running their business. Beyond MCP, international payment solutions like Planet reduce the operational burden for merchants by handling local tax requirements and card network compliance standards related to FX transparency. This translates to reduced overhead on the business side, lower risk, and scalable operations on a global level.
Built for trust – More than anything, MCP builds trust with customers by providing a shopping experience that they understand intimately, from local currency to language and preferred payment options. On the merchant side, there’s enhanced consistency through transparent FX rates, reliable settlements, and a new revenue stream from FX commissions, adding value to business operations and, frankly, making everything that much easier with a payment system that works for a business rather than against it, even across borders.
To recap, an MCP ensures that the entire payment journey, from browsing to customer payment to settlement and refunds, is localised, compliant, and completely optimised to sell at a global level.
Embracing the future of international payment solutions
As global commerce continues to expand, the ability to offer seamless, localised, and transparent payment experiences is no longer a luxury – it’s a competitive necessity to survive in today’s market. International payment solutions, specifically multi-currency pricing (MCP), provide a powerful way to meet customer expectations while streamlining cross-border payments and unlocking new revenue opportunities for merchants.
Adopting MCP is all about building a future-proofed payment infrastructure that’s scalable and directly meets customer needs. Through payment service providers like Planet, businesses can enter new markets with confidence, cut back on operational complexity, and deliver a superior customer experience that fosters long-term trust and loyalty.
If you’re ready to thrive in cross-border commerce, whether in e-commerce, in-store, or omnichannel environments, Planet’s advanced MCP capabilities are prepared to take you there. Ready to get started? Explore Planet’s international payment solutions today.
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