SHAPING THE FUTURE OF PAYMENTS...FX BUSINESS STREAM Best Practices • Multi-currency management...
Transcript of SHAPING THE FUTURE OF PAYMENTS...FX BUSINESS STREAM Best Practices • Multi-currency management...
SHAPING
THE FUTURE
OF PAYMENTS
HIGH ENGAGEMENT MODEL
IMPROVING CONVERSION & EXPERIENCE
Data & Insights Full service
model
Fraud and
Authorization
Management
Dedicated
Teams Innovation
Conversion
Strategy
Checkout UX
However your
customers pay
Intelligent
Growth
CONNECT TO YOUR AUDIENCE
ENGAGE YOUR CUSTOMERS
ACCELERATE YOUR BUSINESS GROWTH
MEET EXPECTATIONS AROUND THE WORLD
HOWEVER YOUR CUSTOMERS PAY
¥
$
£
€
Our extensive global reach and
FX expertise mean you can access
your customers using the most
relevant local payment methods
and the right currency mix.
Currencies
150+
Countries
170
Acquiring partners & banks
230
Payment methods
150+
FX TEAM DEDICATED INDUSTRY
VETERANS
Intelligent Growth
Innovation
Dedicated Teams
FX BUSINESS STREAM
Best Practices • Multi-currency management (MCP) • International processing Business Intelligence • Market leading strategies designed to increase conversion Transparency • Currency conversion mechanics • Pricing & Remittance Support • Strategic opportunity evaluation • Constant analysis
An effective FX team advises merchants on revenue opportunities, currency presentment best practices and payment process improvements
Seamless payment
experiences
Maximized payment
intelligence
Optimized financial
management
MULTI-CURRENCY MANAGEMENT
Allow customers to pay in their local currency and increase sales
Increased conversion
Consumers are more likely to
convert from browsers into buyers
when pricing and payment options
are offered in their own currency.
Reduced shopping cart
abandonment
Consumers will often
leave the checkout page
to calculate their
estimated local currency
price if you do not present
pricing in their currency
Improved authorization rate
An authorization request to a
card issuer in the card currency
is more likely to be successful
than one that is not.
Increase FX Revenue
Multi-currency pricing
provides the flexibility to
adjust prices to the
competitiveness or
socio-economic status
of the target country and
local brand value.
Improved search results
Localized pricing supports
improved indexation and higher
listing by local Google sites and
other local search engines.
Reduced refunds and
chargebacks
Consumers calculate
conversion pricing but
don’t take additional
conversion fees by their
issuing bank into
account, leading to
higher than expected
costs and increased
chargebacks.
CASE STUDY MERCHANT ADDS 4 CURRENCIES
Jul-Dec 2015 Jan-Jun 2016
Country Currency Paid Flow (EUR) Flow (EUR) Currency Paid Flow (EUR)
Europe EUR 133,000,000.00€ 110,000,000.00€ EUR 142,000,000.00€
Argentina EUR 259,000.00€ 135,000.00€ ARS 896,000.00€
Russia EUR 1,131,000.00€ 609,000.00€ RUB 3,985,000.00€
Turkey EUR 996,000.00€ 524,000.00€ TRY 2,084,000.00€
UAE EUR 3,091,000.00€ 2,699,000.00€ AED 7,975,000.00€
TOTAL 138,477,000.00€ 113,967,000.00€ 156,940,000.00€
Jul-Dec 2016
Benchmark EUR flow increase of 6.7%
Flow from added currency nations increased by 272%
€ -
€ 2,000,000
€ 4,000,000
€ 6,000,000
€ 8,000,000
€ 10,000,000
Argentina Russia Turkey UAE
CONVERSION
OPTIMIZATION
Authorization Rate
Optimization
Best Checkout UX
Custom Fraud Technology
AUTHORIZATION RATE
OPTIMIZATION
Multi-local acquiring
Local currency effects
End-customer fallback options
for failed payments
Real-time Invisible re-tries
Peak volume
management
Post-transaction page
AUTHORIZATION RATE ANALYSIS
Foreign Currencies Local Currencies Difference
China 72.50% 91.80% 19.30%
Russia 76.42% 88.73% 12.31%
Japan 76.10% 91.28% 15.18%
United Kingdom 76.17% 91.76% 15.59%
United Arab Emirates 71.20% 83.70% 12.50%
CountryAuthorization Rate
TREASURY
MANAGEMENT
Multi-Layer FX
Strategies Remittance Optimization
AUTHORIZATION AND REMITTANCE CYCLE
SETTLEMENT OPTIONS
Currency Code
Australian Dollar AUD
Canadian Dollar CAD
Swiss Franc CHF
Danish Krone DKK
Euro EUR
British Pound GBP
Hong Kong Dollar HKD
Japanese Yen JPY
Norwegian Krone NOK
New Zealand Dollar NZD
Swedish Krone SEK
Singapore Dollar SGD
US Dollar USD
South African Rand ZAR
• The card schemes mandate 14
currencies can be remitted “like-for-like”
(see table)
• However, not all acquirers settle all 14
currencies, in which case we cannot
remit “like-for-like”
• All others need to be converted into a
remittance currency of the merchant’s
choice (usually USD)
POTENTIAL FX REVENUE
REAL WORLD SCENARIO
• Issuing banks charge consumers 3.0% to 6.0% on FX conversion
• Offering local currency gives merchants control
• Add a spread to the base exchange rate in your ecommerce environment greater than the negotiated spread
• In the above transaction, a customer with a EUR credit card was forced to pay in USD.
• Issuing bank charges 4.1% FX conversion
• If the hotel had offer pricing in EUR they could have either reduced the cost for the customer by 4.1% ($29) or generated an additional FX revenue stream – for example of 2.0% ($14) and still leaving the customer $15 better off.
MULTI-CURRENCY PRICING
STRATEGIES
Domestic Merchant selling in CNY to Chinese Consumers
Adding an additional exchange rate buffer can
a) remove risk
b) generate incremental (FX) revenue stream
3.5% BUFFER
CONVERSION PRICING
Quarterly Converted Flow Standard Non-Standard
< $xM x.xx% x.xx%
$xM - xM x.xx% x.xx%
$xM - $xM x.xx% x.xx%
THANK YOU!
Michael Bilotta
Head of FX – NorthAm and LATAM (M) +1 415 589 9104
www.ingenico.com/epayments