EXCERPT from Chapter 4: Case Study: Planet Payment Facilitates Multi-Currency Internet Credit Card Payments

“This is our vision. A customer from any country is able to make a purchase from an internet merchant anywhere in the world - securely, instantly and in each party’s preferred currency - as conveniently as if the transaction were taking place at the merchant down the street.” - Thomas J. DeLuca, senior vice president, product development, Planet Payment

Introduction

Planet Payment has found an innovative way for internet merchants to accept payments in multiple currencies. The New York-based company has established a network of banks around the world which give it the facility to process credit and debit card payments in 140 different currencies .

The Globalisation of E-Commerce

“The single most significant trend in the e-payments space is the globalisation of e-commerce”, said Thomas J. DeLuca, Planet Payment’s senior vice president, product development. “Yet, for all the hype about the internet erasing borders and facilitating international trade, the fact of the matter is that the credit card industry is not prepared to support the rapid growth in e-commerce.”

Just as important as domestic sales, particularly for US retailers, is the ability for merchants to sell internationally in local currencies. “There is a dearth of solutions for merchants who want to localise their websites for their global operations”, DeLuca said. According to Forrester Research, only 37 percent of Fortune 100 companies have tailored their websites to the different markets around the world.

“In order for US merchants to be able to sell their goods over the internet to foreign markets, they need to be able to price their goods in local currencies and accept local payment options in each market”, DeLuca said. “Because the existing credit card industry cannot support this, a new breed of payment companies has emerged, sometimes referred to as payment services providers (PSPs).”

Customers Prefer to Pay in their own Currency

“Most customers prefer to view prices and pay for transactions in their own currency, whether they are checking out from a hotel in a foreign country or buying online”, DeLuca said. “The global market for this additional margin potential is around $2 billion to $4 billion and is expected to grow rapidly.”

Planet Payment’s customers range from SMEs such as Jennifer Ann Lingerie (see this chapter, Planet Payment Helps New Zealand Start-up Sell Worldwide, page ?) to Fortune 100 companies. “One of our customers is a global financial information provider which sells credit reports and research on its website and uses Planet Payment to accept payments”, DeLuca said. “Another customer is an international media company which uses our system for online book sales.” MegaWheels, a Canadian online advertising publisher, uses Planet Payment to enable customers of its websites in different countries to pay for classified advertising in their own currencies.

What Planet Payment Offers Internet Merchants

The Planet Payment system allows companies to receive online settlement in their preferred currency and lets customers pay in the currency of their choice. The exchange between an American shopper and an Italian online retailer, for example, is automated without the two parties having to swap dollars and liras at a bank. “Merchants can price their goods in the currency of their choice or in several different currencies, and receive settlement in the currency most convenient to them”, DeLuca said.

Furthermore, websites can show customers the same price that will appear on their credit card statements, unlike most cross-border internet credit card transactions, where pricing can change between the time the item is purchased and when it is billed to the credit card due to currency fluctuations.

Planet Payment offers merchants back-end settlement and reporting in the currency of their choice. Its payments gateway is able to accept MasterCard, Visa, American Express and other major credit and debit cards.

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