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MAG Sponsor Spotlight: You're Already Doing International Ecommerce and Paying for It (and You May Not Even Know It) (MAG Quarterly- Volume Four, Issue Two)

By John Staple, Product Manager, First Data GlobalChoice™ Solutions

June 2, 2016

We will explore how this is possible, and what can be done to reduce the cost of doing business with international customers online, while simultaneously giving them a better customer experience.

International customers are using your website, mobile app or omnichannel solution – and you may not even know it. Unless you have a currency conversion or multicurrency solution in place, all those transactions probably look like US dollar transactions, you don’t have an easy way to determine if that Visa® or MasterCard® was issued outside the United States.

Now you may be thinking, “We don’t ship internationally” or “We only provide store pickup in the United States”. In fact, there are many opportunities for various types of international customers to do business with you using their computer or smartphone:

International Residents Living in the United States

The latest figures from the Office of Immigration Statistics estimated that there were roughly 13.1 million permanent residents1 and 11.4 million unauthorized immigrants2 living within the United States. That’s 24.5 million people who may be using a credit card issued outside the US to make purchases online that will be shipped or picked up inside the US.

International Tourists Visiting the United States

According to the National Travel and Tourism Office, 75 million international visitors came to the United States and spent $220.8 billion in 20143. These visitors – like many of the 23 million Canadians who come to Florida or Arizona – stay in the US for extended periods of time. While they are here, they may use a credit card issued outside the US to make purchases online that will be shipped to their temporary residence or other address inside the US.

International Shoppers Buying from the United States  

By 2020, over 940 million people are expected to buy online from abroad, spending an estimated $994 billion – nearly quadruple the amount 309 million people spent in 2013, according to a study by Accenture and AliResearch4. Even if you don’t offer international shipping, they may use a credit card issued outside the US to make purchases online that will be delivered to a third party shipping service inside the US.

Regardless of which types of international customers are generating these Card Not Present sales, they all have one thing in common: they will cost you more money to process! When those transactions are paid using a Visa or MasterCard issued outside the United States, you are going to pay an extra 1.7% to Visa or an extra 1.45% to MasterCard in cross-border related fees for processing those transactions – and that is on top of interchange.

These transactions have one more thing in common: they will also cost those international customers more money! When they use their Visa or MasterCard branded card to pay in US dollars, their payment will be converted at an undisclosed rate of exchange, and they may also face additional fees from their issuing bank. Chances are they will not know the actual cost of their purchase until they receive their card statement, where their charges will not match their receipt. This often leads to possible chargebacks – and even more processing costs for you!

You may be asking yourself, “What can be done to reduce the cost of doing business with international customers online, while simultaneously giving them a better customer experience?”

First Data offers two GlobalChoice solutions for international ecommerce that can help. Currency Conversion (more commonly known as DCC) allows merchants to offer international customers, using their Visa or MasterCard branded cards, the ability to pay in their native billing currency using a guaranteed exchange rate.

Dynamic Pricing (also known as MCP or multicurrency pricing) improves the customer shopping experience by providing international customers the ability to shop online and see prices in their native billing currency, and then pay in that currency, giving them a true “in-country” shopping experience.

Both Currency Conversion and Dynamic Pricing provide numerous benefits for both merchants and their international customers shopping online:

  • Generates a new revenue stream by redirecting the existing foreign exchange revenue enjoyed by the card networks and issuers.
  • Increases customer confidence and improves their shopping experience, while adding transparency of cost in a currency they are familiar with.
  • Reduced chargeback risk and exposure as customers easily recognize their purchases when the receipt will match the transaction amount shown on their card statement.
  • Access to a wide variety of BI reporting which can be used by marketing and operations teams to focus budgets, inventory and provide insight on other business decisions.
  • Attract new business over competitors.

Our GlobalChoice offering includes guaranteed exchange rates eliminating currency exchange risk for both the consumer and the merchant. The currency conversion revenue share merchants generate from these services also helps offset card association fees directly related to the acceptance of international cards. Essentially, every international transaction becomes an opportunity for additional revenue while promoting a customized purchase experience.

If you have any questions or would like to discuss your international ecommerce strategy, feel free to contact


1 Office of Immigration Statistics, Estimates of the Lawful Permanent Resident Population in the United States, March 2015

2 Office of Immigration Statistics, Estimates of the Unauthorized Immigrant Population Residing in the United States, April 2014

3 National Travel and Tourism Office, Fast Facts: United States Travel and Tourism Industry, November 2015

4 Wall Street Journal, New U.S. Rules Make Foreign Goods Better Deal for Online Shoppers, May 2016