After increasing your Payments IQ in the first three boot camps, this webinar covers a hot topic in the online payments world: multicurrency processing. Whether selling digital or physical goods, companies are often tasked with weighing the increased cost and overhead associated with expanding in international markets against the potential for increased sales. ROI Payments will offer up a strategic road map on how to evaluate the payment opportunities available when serving international markets.

1. Brion Bonkowski
Managing Director
July 2, 2013
Boot Camp Week 4
Improve your Payment IQ
Multicurrency in Electronic
Payments: Market Opportunity
or Back Office Headache?

2.  Back Office Requirements
 Providers Matrix
 What’s Next?
 Q&A & Contact Information
 Introduction
 Who is Interested in Payments?
 Why Multi Currency?
 Multicurrency Overview
 Deep Dive
 Web Converter Tool
 Dynamic Currency Conversion
 US Based Multicurrency
 Local Acquiring
 Technology & Gateway Options
Agenda

3.  Who is ROI Payments & Why a Boot Camp Series?
 Who is interested in payments?
 The end result?
Introduction

4. So Tell Me…Why Multi Currency?

5.  US still largest ecommerce market but Europe, Asia,
and LATAM are growing at a much greater pace
 Global ecommerce market will surpass $1.35 Trillion USD
by the end of 2013- just shipped goods- not services
(hard to capture)
 US Dollar only pricing on ecommerce sites more often
than not leads to shopping cart abandonment;
customers leave to:
 Customers leave to check exchange rates and often don’t return
 Go to a competitor’s local site
 Studies show when online businesses price goods in local
currencies, or provide an online currency converter, sales and
revenue will increase in global markets considerably.
Why Consider Multi Currency?

6. Regional Stats on Global eCommerce
Behavior Explanation UK Germany Australia Canada
Local Preference Prefer to make purchases from
local websites
84% 69% 85% 82%
Lost Sales Find products on USD site- then
search for local site to order
86% 80% 68% 63%
Conversion Rates Will leave USD only site to
calculate daily rate
65% 43% 47% 39%
Web Traffic Unlikely to revisit a site only
offering USD pricing
49% 57% 26% 22%
Increased
Revenue
Opportunity
Likely to spend more money on
sites in local currency
71% 64% 59% 53%
Customer
Experience
Concerned with how much
billed for FX
86% 76% 76% 39%
Increase in
eCommerce
Expect to increase online
shopping in next 12 months
63% 35% 70% 57%

7. Let’s Review the Various Options for
Multi-Currency for US Based Online
Businesses…

8. The Four Basic Options for Multicurrency
Option Description Recommended Volume
(in USD) to Consider
Web Converter Tool Simple tool to display items
in local currency as a
reference
<$10k/month
Dynamic Currency
Conversion (DCC)
Present localized currency
at time of transaction and
settle in USD
$10k-$200k/month
US Based Multi-
Currency
Present localized currency
and settle in localized
currency in the US
$200k-$2M/month
Local Acquiring Present, acquire and settle
transactions in local
currency in local region
$2m+/month

9. Multicurrency Option 1: Dynamic Converter Tool
 This is basically just a multi-currency DISPLAY
 Provides customers a REFERENCE for what the product cost is in local currency
 At checkout, USD and local currency is displayed but transaction processed in USD
Advantage: low cost option to enable additional
data on their site an option for eCommerce
Disadvantage: items are not processed in local
currency so customers are subject to cross border
fees, varying FX rates and the transaction does not
feel local
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10. Multicurrency Option 2: Dynamic Currency Conversion(DCC)
 Transaction price dynamically changes based on the days’ exchange
rate at the time of payment
 Customer is presented an option to pay in their local currency (of the
issued card) or in the merchant’s currency
 Customers see the actual amount at checkout that they will see on
their credit card statement
 The exchange rate is provided by the processor to the merchant and
includes a markup on the FX
 DCC an be used in card present (retail terminals) or online
 Transactions are settled back into the merchant’s home currency
 DCC is regulated by Visa & MC and adheres to scheme regulations
Advantages:
 Easy to deploy
 Way to “test international
waters”
 Can deploy up to 140
currencies
Disadvantages:
 The FX mark-up can be
expensive
 Customers can still be
charged a cross border fee
Note: Multi-Currency Pricing (MCP) is very similar to DCC – but instead of using the
cards holders billing currency, it allows for the customer to choose which currency
they prefer. MCP is not regulated by the schemes as it is a merchant re-pricing
function not related to the card issued.
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11. Multicurrency Option 3: US Based Multi-Currency
 Presentment and settlement in a local currency to a domestic account
 Limited acquirers can enable this option, a few of them being:
 Only a handful of gateways support this functionality
 Requires merchants set up multiple domestic bank accounts (one for each
currency supported) and thus support this in their financial systems
Advantages:
 Good hybrid option
 Lower fees than DCC
 No international entities
required
Disadvantages:
 Acceptance may be lower
 Cross border fee still may
apply
 More back-office financial
oversight and maintenance
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12. Multicurrency Option 4: Local Acquiring
 Establish acquiring relationship with a local banking institution and settle the funds to
an account in that region
 Best option for established businesses with high volume in particular regions
 May require the establishment of a business entity in region
 Typically- provides for the highest acceptance rates for cards, can be a lower
transaction fee and allows for local schemes
 No cross border fees for merchant or customer
Advantages:
 Lower transaction costs
 Best card/scheme
acceptance
 True local feel
Disadvantages:
 Local entity required
 Tax implications
 More complex
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13. Technology & Gateway Options
 Technology: Merchants need to ensure that the shopping cart, billing system or
custom code that runs their businesses can support multiple currencies
 Ability to store and deal with foreign characters (UTF8)
 Ability to store sale price, fx rate, actual settlement expected price, etc.
 Report appropriately to the financial side of your business
 Gateways:
 Not all gateways are the same- need to consider what platform to invest in- especially if
doing tokenization (even of not doing multi-currency)
 SMB Gateways- completely US focused
 Enterprise Gateways (small handful):
 Multiple currencies
 Multiple MIDS
 Can do slides 2/3/4
 Deal with localized acquiring, online pin debit, 3d Secure, etc
 Gateway plus Acquiring: PayPal option or Global Collect- have
integrated acquiring into their platform natively- PSP

14. Vendor Matrix
Acquirers Processors Technology

15.  Option 1: Web Converter- little/no back office considerations
 Option 2: DCC:
 Need to be sure to track/record the daily exchange rate(s) from your cash desk as well as what was used in the DCC
transaction.
 Ensure an audit trail exists when testing the DCC solution
 Consider exposure in these areas as the exchange rate/fee is not refunded back and cannot be recouped.
 Option 3: US Based Multi-Currency
 Establish/maintain a process to sweep or hedge the funds in each account
 If your company has expenses or other payables in other currencies it may be an option to monitor expected expenses and
pay them through that currency account for payouts
 Option 4: Local Acquiring
 Maintain policies and procedures for intercompany transfers
Overall FX & Accounting: Strategies 2-4, you will need to track your foreign exchange (FX) realized gains and
losses and report them on your balance sheet
Chargeback & Refunds:
Back Office Requirements

16.  Pricing should consider drivers from marketing and finance discussion for how to price
goods or services
 Multicurrency pricing is easier for one time purchases and/or hard goods
 Service companies, SaaS providers, and recurring billers it is more difficult. Need to be very
mindful of FX considerations on pricing:
 Provide the option to pay in local currency recurring or in USD (different amount each month)
 Depending on the type of service sold, need to be comfortable with the FX risk
 Have ability to reset prices monthly or quarterly for new customers- track what each
customer is paying if the price fluctuates.
 Often in service or digital good companies with big margins- the goal
is to drive adoption and deal with the FX at a later date once more
of the market is open
 Market considerations on pricing- is there a local competitor taking
market share? May want to be able to offer comparable customer
experience and pricing.
Pricing Strategies

17. After you are set up to handle other currencies…the next step is implementing
local and alternative payment methods- which is the topic of our next Boot
Camp!
So What’s Next?

18. Contact Information:
Brion Bonkowski
brion@roipayments.com
212.812.4177 x: 2134
Questions & Contact Info