How to Implement Multi-Currency Options on Shopify

Today’s consumers expect a seamless shopping experience in their local currency. 

For merchants, this poses a significant challenge, particularly when purchasing in one currency and selling in another. However, mastering the operational complexities and maintaining healthy margins in multi-currency e-commerce is well worth the effort, especially as the cross-border e-commerce market soared to nearly $400 million in 2022. According to a report by Statista, cross-border e-commerce sales are expected to reach $700 billion by 2025, highlighting the growing importance of catering to international customers.

In this article, you’ll learn:

• Why It’s Important to Offer Prices in Shoppers Native Currency
• How Currency Conversions Work in Shopify
• Setting Up Multi-Currency Acceptance in Shopify
• Getting Started with Localization using Shogun
• Future Trends in Multi-Currency E-Commerce

Let’s dive in!

Why It’s Important to Offer Prices in Shoppers Native Currency

Every day, new e-commerce brands launch and consumers worldwide are shopping online. According to a study by CSA Research, 76% of online consumers prefer purchasing products in their local currency. Merchants who don’t utilize local currency pricing strategies are not only missing out on potential sales but are also risking customer satisfaction.

Reduce Shopping Cart Abandonment

While there are many reasons for shopping cart abandonment, presenting prices in a currency different from the consumer’s own can deter them from completing the transaction. The Baymard Institute backs this by revealing that 70% of online consumers abandon their shopping carts. A good reason would be hidden extra fees that would later show up in their bank statement, which result in 55% shopping cart abandonment.  

Another statistic by StoreHippo also found that 13% of online shoppers abandon their shopping carts when the prices aren’t in their local currency.

Prevent Confusion and Increase Transparency

When merchants fail to offer prices in the local currency, customers may become confused, leading to miscalculations. If a shoppers’s estimate ends up being lower than the actual charge they see on their bank statement, it can create frustration and often result in negative reviews.

In some countries, exchange rates fluctuate significantly, increasing the likelihood that consumers will miscalculate costs. This can result in unexpected charges and discourage them from ever shopping at your store again. According to the International Monetary Fund, exchange rate volatility can affect consumer confidence and spending behavior, making it crucial for merchants to manage currency conversion effectively.

Your competitors are probably already offering prices in local currencies. Here are some strategies when it comes to pricing to take into consideration:

Automatic Pricing: Automatic pricing is ideal for merchants with a diverse product range that changes seasonally and requires frequent inventory updates. To implement automatic pricing, merchants need to integrate a currency-converting app into their store, which handles the entire process seamlessly.

Manual Pricing: This strategy works best for smaller stores that don’t have a lot of products because it’s easier to keep track of which products are performing the best. Make sure to factor in the latest exchange rates that change on a daily basis.

How Currency Conversions Work in Shopify

Currency conversion is simplified with Shopify, as it allows its merchants to cater to international customers efficiently. Here’s how Shopify handles currency conversion:

1. Automatic Currency Conversion: Shopify provides automatic currency conversion based on the location of the shopper. Let’s say a visitor from Germany lands on your store. Shopify will present the currency in euros if automatic currency conversion is enabled. If your product is priced at $10, the automatic currency conversion might show €8.81, calculated as the product price multiplied by the currency conversion rate plus a conversion fee.
2. Manual Currency Conversion: Shopify also offers a manual selection tool that lets shoppers choose their preferred currency. This feature is especially useful for travelers who want to shop in their home currency, even if they are currently abroad.
3. Exchange Rates and Updates: Exchange rates are updated constantly on Shopify in order to reflect current market conditions and fluctuations. However, merchants should still monitor currency fluctuations, as these can impact profit margins. Adjusting prices accordingly ensures that profits remain stable.
4. Handling Currency Conversion Fees: Merchants should take into consideration additional fees when dealing with currency conversions. Shopify Payments manages currency conversion with small fees, but merchants using third-party payment gateways may have additional charges. This is why it’s important to be upfront and transparent about these fees with customers to maintain trust. Processing fees can vary greatly, with some third-party payment providers charging up to 3% per transaction.

Setting Up Multi-Currency Acceptance in Shopify

Jewelry brand Moonglow shipped to 84 countries within their first 20 days on Shopify, thanks to the multi-currency feature that boosted international conversions like never before. With Shopify payments, small changes like showing the prices in the visitors local currency go a long way. 

Here’s how merchants can set up multi-currency on Shopify:

• Enable Shopify Payments: In order to utilize this feature, you first need to activate Shopify Payments. Go to your Shopify admin panel, then click on “Payments” and select Shopify Payments. Follow the steps to set up your account, as this is the foundation for setting up multi-currency pricing.
• Configure Currencies: Once you’ve successfully activated Shopify Payments, select “Payments” and then go to “Manage,” which is under Shopify Payments. You can select which currencies you wish to accept out of over 130 supported by Shopify.
• Customize Currency Display: Shopify allows merchants to customize how currencies are displayed on their store. Choose whether to display currency symbols and round prices. Adjusting these settings can significantly enhance your customers’ shopping experience.
• Implementing a Currency Selector: Adding a currency selector is a great option for your customers to choose their desired currency. A currency selector can be added through Shopify’s theme editor or by installing a currency selector app from the Shopify App Store.
• Testing: After setting everything up, you need to test out the configuration. Check from different devices and locations if the currencies are displayed accurately. 

Getting Started with Localization using Shogun

Localizing your Shopify store goes beyond simply translating it. The goal of a successful localization strategy is to adapt culturally to the local market and appeal to the preferences of its consumers. 

Here’s how merchants can use Shogun to create a personalized experience for an international audience:

• Creating Language-Specific Pages: With Shogun, you can easily create pages in different languages by duplicating your existing pages and translating the content (content localization). Ensure that everything is translated, including product titles, descriptions, articles, banners, and text on images and buttons. For added localization, consider using a holiday theme that aligns with the local market’s celebrations.
• Using Dynamic Content: This feature helps show different versions of your content based on the visitor’s location. This is a great way to localize product recommendations, offer region-specific promotions and do other customizations. For example, merchants can display a winning banner of the local market’s sports team to build a stronger relationship. 
• Optimizing for Local Search Engines (SEO): Optimizing your local content with relevant keywords can significantly boost organic traffic. Shogun assists in this process by optimizing meta titles, descriptions, and images, while also offering AI-powered insights for even better results.
• Mobile Optimization: Ensuring that your localized content is optimized for mobile devices is essential, as mobile shopping continues to grow globally. Shogun allows you to customize how elements appear on different screen sizes, ensuring that your store provides a seamless experience across devices.
• A/B Testing: Continuously testing multiple page variants is crucial for effective localization and maximizing conversions. Use analytics to monitor the performance of localized content and make adjustments based on user feedback and engagement metrics. Regularly review and update your content to keep it relevant and effective.

Future Trends in Multi-Currency E-Commerce

According to a report by McKinsey, the online payments’s sector will become a $2.5 trillion industry. Cross-border digital payments remain strong worldwide, but mostly driven by the Asia-Pacific region. Even though B2B takes the most revenue in cross-border payments (69%), B2C has higher profit margins and is projected to grow even more in the following years. 

Here are some of the following trends to watch out for:

Localized Pricing Strategies

As merchants are looking to serve and gain more customers in global markets, they are developing localized pricing strategies. This involves adjusting the prices to their local market conditions, which takes into account their cost of living along with competitor prices. Advanced analytics and market research tools are helping businesses implement effective localized pricing.

• Examples: Brands like Zara and H&M adjust their pricing strategies based on regional economic conditions and consumer behavior.
• Impact: Enhanced competitiveness in local markets, better alignment with consumer expectations, and improved sales performance.

Cross-Border Tax Compliance Solutions

As cross-border ecommerce grows, tax compliance becomes more complex. New solutions have been created to simplify this complicated process consisting of calculating and collecting taxes across different country laws. These solutions seamlessly integrate with e-commerce platforms like Shopify to guarantee precise tax calculations and adherence to local regulations.

• Examples: Tools like Avalara and TaxJar provide cross-border tax compliance services for merchants.
• Impact: Minimized risk of tax-related issues, simplified compliance processes, and enhanced financial accuracy.

Integration of Cryptocurrency Payments

Cryptocurrencies are emerging as a practical payment option in multi-currency e-commerce. As digital currencies such as Bitcoin and Ethereum gain mainstream traction, more e-commerce platforms are incorporating cryptocurrency payment gateways. This shift enables businesses to engage with tech-savvy customers and explore a growing market segment.

• Examples: Shopify merchants can integrate apps like BitPay or CoinGate to accept cryptocurrency payments.
• Impact: This trend broadens payment options for customers, potentially lowers transaction fees, and opens doors to a new customer base.

Conclusion

In ecommerce, offering prices in shoppers’ native currency is not just a nice-to-have feature—it’s a necessity. It enhances the customer experience, builds trust, reduces cart abandonment, and boosts conversion rates. As global e-commerce continues to grow, businesses that prioritize localized experiences, including local currency pricing, will be better positioned to succeed in the global marketplace.