In a bid to overcome the challenge of abandoned baskets, online retailers have a wealth of techniques at their disposal with which to enhance the user experience (UX) and smooth out the customer journey. That's because their long-term success depends on taking customers more reliably from browsing to buying, and on bringing them back another time.
A great deal of science has gone into this, with the ultimate aim of making every ecommerce site a 'friction-free' environment, whereby issues that can drive customers away, such as complicated sign-ups and hidden postage costs are no longer a problem on the best sites.
This is largely because today’s users have little or no patience with ecommerce sites that are badly planned or time-consuming to use.
However, with security just as important as 'sticky pages' for etailers, that presents a significant problem when it comes to making instant payments. And customers really do demand instant payments these days, wherever they are in the world. So how do banks and credit card companies make instant payments possible? Well, the fact is that they actually don't.
The Hidden Paper Trail Behind Online Retailing
People often assume that instant digital payments online are a step ahead of the old days, the world is so much better now that we don't have to wait days for cheques to clear.
However, in point of fact, banks still have a 'paper trail' for every transaction. So when customers pay an online retailer, their bank is effectively creating a 'virtual credit'. It looks as if money has changed hands, but that isn't really the case until the paper trail makes everything official a few days later, when there may have been a fluctuation between the currency paid for the goods and the currency that the retailer uses.
How Can Retailers Protect Themselves From Currency Fluctuations?
Every online retailer has a fixed profit margin that they need to get from each transaction. For example, you might have a product that costs you £5 and must sell for £10 in order to protect your cost base.
Difficulties could arise when you make a sale to a customer in France who pays you in Euros. A currency fluctuation in the following days might mean that instead of £10, you only receive £9, which if it happens too often can cause a significant problem for your bottom line.
Equiniti International Payments sets a guaranteed rate for every currency every day. This enables our clients to set their own daily prices to the global market, secure in the knowledge that they can provide the instant payments and great experience their customers demand, and that we guarantee their profit margin will be maintained on every single transaction.
Find out more about the Equiniti International Payments Multi-Currency Pricing with Guaranteed Rates tool.