Over the years, our shop has been forced to create custom systems for clients who need to work with multiple currencies. Virtually no third-party support had existed. Fortunately, a host of solutions that make it quite easy to localize your currencies have emerged.

Accept Credit Card Transactions in Multiple Currencies

The market is heading toward accepting credit cards in multiple currencies, and I encourage you e-commerce visionaries to take the same route. This will make it possible for your customers to purchase your goods and services in their native currency while you receive payment in your native currency. Credit card transactions are the largest e-commerce payment vehicle. According to the Economist (June 19, 2000), over 95 percent of all Internet transactions last year were credit card based. The Economist projects 81 percent of all transactions in 2005 will continue to be credit card based, even with new payment methods on the horizon and the growth of B2B e-commerce.

Until now, it's been nearly impossible for all but the largest vendors in the world to have a multicurrency merchant account and payment gateway. Fortunately, solutions are now available for small companies. One company, Planet Payment, has created a comprehensive solution to sell online in 146 currencies and receive funds in one of 22 currencies. The company has solutions for vendors of all sizes, inside or outside of the United States.

Planet Payment CEO Philip Beck confirmed the massive pent-up demand for online multicurrency solutions. His company launched less than a year ago and has already been bombarded with applications from merchants in over 120 countries! Trust me, very soon you will see tons of merchants accepting payment in multiple currencies.

For an example of a site accepting credit card payment in multiple currencies, visit 123Translate. Clients are billed on their credit card in the currency they select.

Link to a Free External Currency Converter

The most common multicurrency approach is adding a link to a free currency converter from your Web pages. Yahoo lists 18 companies that provide these converters. The disadvantage to these free services is that they have strict Terms of Use agreements that release the providers from all information accuracy liability and prohibit any form of redistribution. In other words, the information is provided "as is" and you can only link to it. Some service providers like Xenon Laboratories allow you to customize their interface to create an appearance consistent with your site.

For an example of linking to an external service while keeping your appearance, visit the Little Dix Bay and click on the currency converter link at the bottom of the page. It takes you to Xenon's Web site but keeps the appearance of the Little Dix Bay site.

Embed an External Currency Converter

Embedding an external converter is similar to linking to one, except that the currency exchange application resides within your Web pages. This is useful if you don't want your visitors leaving your Web site. Two such services are Xenon Laboratories' Shopper's Currency Converter and Oanda's FXCommerce. Xenon's offering is free and has extensive online instructions. Oanda doesn't list a price for its solution. Both solutions are client-side applications driven by JavaScript. To integrate this solution, you cut and paste the provided JavaScript directly into your Web pages.

For an example of an embedded currency converter, visit C&D Tax accounting services.

Retrieve Exchange Factors and Integrate into Web Site

Linking to or embedding a converter only provides a way for your users to manually convert currencies. They have to type in all of the numbers and select the currencies themselves. If you want to create a custom solution that automatically calculates and displays converted amounts with no user interaction, you will need an integrated solution. This involves licensing a currency exchange feed from a vendor, periodically retrieving and storing this information onto your server, and using these rates to perform your own currency exchange calculations.

I recommend Oanda's FXP solution. I've found that the price of the annual currency exchange feed was a lot cheaper than three other vendors I contacted. Contractual restrictions prevent me from disclosing the price, but suffice it to say that the next cheapest one we looked at was 20 times more expensive! The product not only had a good price, but the company provided code in Java, C, and Perl to easily retrieve the currency factors.

For an example of this option, visit QXL, a U.K.-based auction site. QXL retrieves a daily update of currency exchange factors and has server-side and client-side code to automatically convert currencies enabling multicurrency auctions. While you're there, take a look at the JavaScript source code on any of the bidding pages. It's a great example on how to use currency factors to perform currency conversions.

Important Issues

Regardless of the option you choose, take note of the following key issues.

Learn about the Euro - The Euro is the single currency of the European Union. It existed as a currency from January 1, 1999 but will only gradually move into general use with the introduction of coins and notes in 2002.

Learn how to display currencies and amounts - If you integrate your own currency converter, you will need to standardize how you display and round off currencies. I recommend using the ISO 4217 standard for identifying currencies like JPY for Japanese Yen. You will need to build a rounding table to determine how many decimal places you should round off for each currency such as no decimal places for Japanese Yen. Information from Pacific exchange rate service should help you build this table. As an example, if you convert $98.99 to Japanese Yen and end up with 10,650.92765, you should display the results as JPY 10,651. Select a currency exchange rate - Currency exchange rates are market driven and change often. Most services have just one currency exchange rate, which should suffice for most needs. However, if you run a B2B site, and your target market is large corporations, you should consider Oanda's services. They can provide consumer rates (typical credit card and cash rates) as well as large corporate rates (interbank rates).

It's Business Sense

I believe that by next year consumers worldwide will start demanding multiple currency solutions. Beck warns that many European consumers already demand e-commerce transactions in their own currency. If you look at the demographics of the Web, more people access the Internet from outside of the U.S. than from inside of the U.S. And these people have a native currency other than the dollar! Reach out to them in their currency or someone else most definitely will.

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