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My company is based in the UK and are looking to promote a product in the US.
We think it will be an attractive product to US consumers - but whilst the advertising materials will quote the price in dollars, the actual transaction will be in £ sterling.
I was just wondering if anybody has any experience in whether this will work - will US consumers be prepared to pay in £ sterling?
Any help/guidance/advice much appreciated.
DaveN
Ive done work on a site that shows the price in dollars but the transactions is actually in pounds, and i have to say its worked ok, all the transactions are from americans.
I think you have to make it absoloutley clear that the transaction is actually in pounds though. Cant be too careful.
Foreign currency transactions are far more unusual for US consumers. Credit cards normally provide excellent exchange rates, but I can imagine that many inexperienced consumers would harbor concerns, however ill-founded, that they would end up paying more than expected.
The product is definitely uniquely British and I hope that does mean people will be prepared to pay in pounds.
I figured some consumers may be put off - but I have paid for goods in dollars.
It is really encouraging that others have made this model work...
If the product is unique to the UK, I think those who are apt to purchase would prefer it in dollars because that is what most here understand and feel comfortable with. I don't think there would be much problem paying in British currency if the exchange rate is very clear. $XXX (£XXX).
In the meantime, I'd include a link on your order page with a brief explanation about currency exchange, sort of a minimalist FAQ. The text should be designed to allay any concerns about hidden charges, unfair rates, etc. I'd keep this very simple, short, and reassuring.
If I have to leave to find out how much something will cost in US dollars, I'll probably just go somewhere else that has prices in dollars. It's not that I only want to buy in the US, it's just that I'm too lazy to do the conversion myself. ;)
I don't mind paying in whatever currency you want, as long as I know how much that converts to in my currency. AND if you can reassure me that I will not have to worry about receiving my goods after I pay for them. Usually that can be done with a followup e-mail saying... payment received, items shipped, etc.
if it isnt unique - the ratio of buyers turned away is proportionate to the ease of getting the product elsewhere - or at least their perception of being able to get it elsewhere...
this also applies if the product is significantly lower - although consumers are less likely to snatch a 'good deal' - if they dont directly undertstand the monetary value of the good.
for such items as electronic goods - or indeed most products that are not made by the company selling it - multiple currencies on offer is really the only way to go if you dont want to lose sales...
also - depending on the item - the geographic location can make a difference - a very english product will be fine to buy from the US - so long as there are clear trends in the site design that make them feel as though US delivery is standard, easy and fast (and isnt tons extra shipping)...
however - for small items, and everyday goods, even gadgets - most people will search for another supplier that offer prices they understand, and shipping that will be both cheaper and faster - remember - everyone wants everything they buy from the net as fast as possible!
Hope that is of some help...
Harley
I use WorldPay, and can publish prices and accept payment in GBP, EUR and USD without any extra fees.
What this means is that a US customer can have an exact US Dollar amount charged to their card; not a GBP amount converted by Visa / Mastercard / Whoever's exchange rate of the day.
The benefit for both you and your customer is that if you have to refund a payment made in EUR or USD; the customer will get back the exact amount paid regardless of any interim exchange rate fluctuations.
Of course this is "paid for" in the WorldPay offered exchange rate.
My two cents is to have separate pricing in true US dollars, like dmorison suggests. IMO Americans will be very reluctant to make foreign currency purchases on their cards.
Initially we only accepted UK pounds, which cost us sales. We now accept payment in US dollars, UK pounds and euro's
Initially we put them straight into our bank account, and paid a fee to our bank on each transaction.
Now we have dollar and euro accounts, the payments go these and we don't have to pay anything (except a nominal monthly account fee)
If you accept credit cards isn't the currency conversion handled for you? albeit at a poor rate.
The US consumer likes to see and pay in US dollars.
BBCAmerica is probably one of the largest e-tailers of "British goods" to the US market, all prices and payments are in USD. Although the parent is British they decided to become Americanized.....I would advise following that lead.
There will be a percentage of US consumers that will live with the currency conversion, but you will never really know how many won't.
To maximize your efforts I would look for a solution that allows charging in USD.
WorldPay, as suggested by dmorison is one solution. Depending upon how large your operation is you may also like to consider setting up a US operation.....it isn't very expensive to achieve.
Setting up a US corporation, merchant account & bank account will leave you change out of £300. Do it in a tax friendly State, like Florida, and your annual costs are likely to run about another £400 for corporation, tax filing and accounting. A little higher if you are making several million per year....but then who cares.
As a sideline benefit you get to right-off a few business trips (once, or more if you like, per year) to the US to sign the paperwork;)
US customers seem more fixed and want to pay in US dollars, there seems to be less of them who have any idea of currency conversion and current rates of exchange. Some have asked me: "how much is that in dollars" and they don't understand that the price I quote them now can be different tomorrow! I beleive the reasons for this are simple: the UK is small and we are more likely to buy things from abroad (either at home, or through work) and need to pay in Euros, Yen or Dollars. But in the US, I would estimate that they have a much wider range of products available to them in their own currency and don't need to buy in anything other than dollars.
Anyway, I think it would be of benefit to you to take payment in dollars. WorldPay (as mentioned above) is simple to integrate and can supply a feed of currency conversion for you to display prices on your site in multiple currencies. If cost is a problem, you could try PayPal (note: try paypal as a last resort - better to have a 'proper' payment method for most customers). PayPal may give you an indication of the numbers of customers who want to pay in their own currency and you can then work out if WorldPay would be worth the cost, bearing in mind that you will get more than 10 times the number of people paying through a simple payment screen (WorldPay) against a log-in or set up account method (PayPal).
Charging US dollars will provide some comfort level, but frankly I think your bigger hurdle is getting people to purchase from you period. Many avoid getting products from foreign companies over the net unless they (or folks they know) have had good experiences with the company or the company is well known with a good rep here. This in itself will diminish your pool of potential buyers quite a bit at least initially. That is why I said those who are apt to purchase probably would not object to paying in pounds or euros if the product is unique and they like it. The minute people see you're located in another country with no US presence that alone will scare off a bunch leaving a smaller more venturous group who I think would be open to dealing in another currency. Americans need to see you are just as reachable as a US company should they experience any problems or have questions and that you aren't going to close shop right after taking their credit card number.
If you take percentages suggestion on setting up a US corp, be careful which state you pick. Florida is a very tax friendly state, but it also harbors the most amount of fraudulant activity in the US. Those outside Florida would probably feel more comfortable dealing over the net with a UK company than a Floridian one.
We have two near-identical dating sites, which accept payment in pounds. One is targetted to the UK, the other USA. Even though the US site has the membership fee converted into dollars, conversion ratios are far lower than with our other site. Some American's are hesitant about anything to do with non-dollar currencies.
