Online commerce is huge and it is only becoming bigger. As the holiday shopping season is just around the corner, many business owners in India are looking for ways to further grow sales and profits. With 830 million Internet connections in the country (in 2021) and an expected smartphone base of 1 billion (by 2026), there is significant headroom for almost every online business (Source: IBEF).
If you run a small offline store, you might have plans to start selling online. If you already have an e-commerce portal, you might want to expand the reach to build a pan-India presence. But what if you already have that too? The next option in line is to go global with your products and services.
If you want to encompass a global customer base, you might be tempted to reach an international audience. Selling overseas simply means more potential customers, and when done well, a significant boost to your business. However, this angle of business growth has its fair share of complications and challenges, one of which is international payment acceptance.
In this post, we will walk you through various sides of international payment acceptance in detail.
Common roadblocks related to accepting international payments
Before you start selling online and accepting payments from international customers, you need to abide by a handful of regulatory compliance requirements as defined by law. In some cases, business compliance is a one-time effort, while others involve a consistent process of audits.
Another significant side of global payments that seem frightening to many Small and Medium Businesses (SMBs) is the transaction charges levied by various overseas banks and card companies. If businesses need to pay more to accept payments online in foreign currencies, it will ultimately add up to the product cost and may make its price unreasonable.
In many cases, tracking international systems can be quite difficult unless there is a reliable system containing the backlog in place. Otherwise, you would need to follow up with the issuer bank and buyer to get hold of the payment received.
Currency conversion as per exchange rates
Once you are done with the compliance checks and other regulations, the next big challenge is to deal with the foreign exchange rates and accordingly figure out the product/service pricing. Ideally, you would want the payments to get converted into Indian rupee (INR) in real time.
While that is possible, it is important for you to better understand the exchange rate phenomenon. Let’s cover that in detail.
How is the exchange rate related to international payments?
In simple words, the exchange rate refers to how much money in one currency you can trade for another. For example, as per the current exchange rate, you can trade Rs. 83.16 for US$1. Exchange rates are determined by foreign exchange trading, which is an international market that involves buying and selling different currencies.
Forex trading involves both small transactions needed when people travel to a foreign country and large ones related to businesses. It happens all day and each day, which is why the exchange rate keeps on changing for most currencies. Since a majority of world trade happens in USD, most exchange rates are compared with this currency.
While some countries have flexible exchange rates that keep on changing as per supply and demand, others have fixed exchange rates. In other words, the currency exchange process related to your business will depend on the location of your target consumers.
This does not end here, as there are several factors that determine the exchange rates, including the following:
- Interest rates charged by financial institutions
With the change in these interest rates, the currency value changes. For example, higher interest rates allow lenders to earn a higher return on loans disbursed, which makes people spend more in that country, and ultimately the exchange rate increases.
- Supply of cash
How much cash our country has on hand impacts both exchange rates and inflation. If there is too much cash in circulation, it causes inflation which also means the value of the currency has fallen because there is more of it. When that currency is exchanged for a foreign currency, the final rate will be determined by a decreasing exchange rate.
- Economic health of a country
The financial stability of a country plays a crucial role in determining the currency exchange rate. For countries that have strong economies, individuals will be attracted to buy its goods and services, which thereby injects more international currency into the local economy.
As you can see here, there are several facets involved in accepting international payments in your native currency. Here’s the next question you might have in mind:
Do you need to deal with currency exchange rates all by yourself?
That won’t be needed provided you have selected a reliable payment gateway that supports international payments. The underlying payment solution provider will have all the necessary arrangements and compliance requirements adherence in place. All you need to do is compare payment gateways and select the right one that turns out to be the most suitable for your business.
Want to know more about how the right PG selection helps? Continue reading.
Why select a payment gateway that helps with real-time currency conversion?
Various hassles related to currency conversion, be it exchange rates, compliance, or settlements, can be best handled with the right payment gateway. Here are a few other reasons you should zero in on a PG that accepts international payments:
Firstly, an international payment gateway will automate the currency conversion process, which is otherwise done manually for various other needs. When your international customers reach the checkout page on your online store, they will see detailed payment information including the amount to be paid and the currency conversion charges (in case you want them to pay for the currency exchange). Once the payment is made, you will receive the payment in INR in your bank account.
Another significant benefit of selecting an international payment gateway is that you get to see the money in your bank account on time. The time it will take to get the money transferred to your account depends on the payment gateway settlement cycle, which ranges from one to five days.
Comprehensive merchant dashboard
Once you start selling products/services globally, you would also want to keep a track of payments received from different customers. A payment gateway that comes with an integrated merchant dashboard will make the reconciliation process easy for you and your teams.
Wondering which payment gateway in India supports international payments? Look no further than Paytm Payment Gateway.
Select Paytm Payment Gateway to accept payments in all major currencies
Paytm Payment is one of the most popular payment solutions trusted by the leading companies in India. It can help you take your business toward global customers by enabling international payments from 200+ countries. There is not one but many features that make Paytm Payment Gateway the best in India, including:
- No additional API integration needed
- Quick and transparent currency conversion
- Upfront transaction charges if any
- Reduced user drop-offs
- Flexible bank settlements in INR, and more
Is real-time currency conversion possible for business?
The right selection of payment gateway can help streamline the currency conversion process for your business. You can receive the international payments straight into your bank account after conversion.
Do you need to pay charges for real-time currency conversion?
This depends on the payment solution provider. The currency conversion charges are mostly based on the exchange rates. For more details, connect with our payment gateway support experts.
How do settlements happen in case of real-time currency conversion?
The settlement of payments in your merchant account depends on the payment gateway you select.