The Internet's a global medium, but you wouldn't know that by looking at the fact that many online merchants seem to offer products only in their national currency. Yet by not offering pricing in local currencies, you could be hurting your efforts to expand your business to a flourishing global market.
That's where E4X comes in. The company, based in New York, provides the software and backend services to not only handle international pricing at the point of sale -- but to make the process more profitable for merchants.
At its most basic, E4X's service displays a product's price in the buyer's native currency. (The purchaser's location is determined through IP address targeting, but the buyer also has the option of changing the currency manually.) When the transaction is processed, however, the merchant is paid in their own currency.
"So, U.S. merchants would price everything in U.S. dollars, and know how much he's getting from a sale in kronors," said E4X Chief Executive Yuval Tal.
In other words, that means merchants never have to mess with the complex and often confusing process of currency conversions.
To avoid problems with currency fluctuations that can complicate payment and accounting, E4X updates its rates daily. With each transaction it processes, it also notes the exchange rate as of that day -- which simplifies any accounting done after the fact. It builds its fees into the prices it displays.
The entire process is managed by E4X's software and service, which takes into account on each transaction the myriad of commissions and fees, events like charge backs, and so on.
"You have a spaghetti of different charges, and if you cannot link them together to a specific amount, you'll never be able to find out what the hell happened there" in a transaction, Tal said. "You need to link the rates, and we change the rates every day. If the transaction took place on Monday and reversed on Wednesday, you need to be able to match it."
E4X also provides the necessary services to support accounting and auditing.
International merchants "have to comply with a whole series of rules and regulations that apply to the fact they deal with currencies," Tal said. "If you have to do auditing ... you have to show full and clear reconciliation. We provide a report for full compliance with auditing requirements."
So far, the design is proving a popular one: E4X services about 70,000 Web sites.
Going Global: Benefits for Sellers
One reason that the solution is becoming accepted is that E4X's currency conversion solution enables merchants to facilitate international purchases without requiring consumers to use credit card-based conversions.
Typically, a buyer in another country would have to pay a number of fees (generally hidden at the time of purchase) to credit card companies and intermediary banks in order to make an international purchase. With E4X, there are fewer intermediaries -- the transaction is processed as a local credit card transaction. As a result, merchants can either handle international transactions more profitably, or pass on the savings to customers.
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| E4X powers Reg.net's currency exchange -- easing the sales process for both shoppers and sellers. |
Offering local currency also has important marketing benefits, Tal said.
"We see a significant increase in conversion rate when us merchant shifts from U.S. dollars into local currency -- all the way up to 4x in currencies like yen," he said.
The system is flexible enough to take into account some very critical -- yet often overlooked -- aspects of price marketing.
"When you sell something, you need to round something to a marketing number ... like 99 cents in the U.S. so you need the ability to round it ... we can control the pricing," Tal said. "You can also adjust current according to the buying power of consumers" -- for instance, raising a price in yen as compared to U.S. dollars.
These advanced features come at a price, however. In part to cover its margins, E4X won't work directly with merchants unless they're doing more than $2 million worth of international business. Fortunately, its partners include a number of popular online payment services and merchant solution services -- such as Kagi, Digital River's Reg.net, and CanadaPost's BorderFree.com. Using those service, even small businesses can take advantage of E4X's services.
Christopher Saunders is managing editor of eCommerce-Guide.com.
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