I would divide people who have scaled their store abroad and are selling there into two types.

Those who are already consciously managing their currency. And those who are not yet doing so.

There is nothing in between. If at this moment someone is not managing currency in any way, but they are earning (processing transactions) in a foreign currency, they are actually losing money.

When it comes to cashless transactions, foreign payments are discussed in terms of:

1/ Transaction currency

2/ Settlement currency

Transaction currency is simply the currency in which the payment is made. This is the currency from which the customer’s account is debited. So, if we set the price at 10 EUR, the customer’s account will be charged 10 EUR. There is no conversion happening along the way.

Settlement currency is the currency in which you, as the store, will receive the money from the payment gateway you are working with. In the case of the above-mentioned 10 EUR transaction, it may indeed be 10 EUR, but it could also be an amount in PLN, because the payment gateway (or someone from the gateway) may convert those EUR to PLN at their own rate and send you the PLN after the conversion.

I recently had a client who didn’t know what transaction currency is.

He had a store, processing tens of thousands of EUR in transactions per month, with prices in EUR for his customers.

The problem was that with his payment provider, the transaction currency was not set correctly.

This led to the situation where the user who bought something for 10 EUR would sometimes see a charge of 10 EUR on their bank statement, sometimes 10.50 EUR, and other times 9.50 EUR.

I think you can imagine how many inquiries this caused regarding strange charges on the card, and how much it burdened his customer service department.

Another time, I had a client who had arranged a deal with a decent payment provider to handle currency transactions in USD. But he never asked in what currency he would receive money from the provider.

It turned out that he was receiving money in EUR because that was the only way the provider could process those transactions.

For a while, the client didn’t notice this. He had an account in PLN.

So the provider was transferring EUR to his PLN account.

The recipient’s bank, of course, converted the EUR into PLN, so some amount appeared in my client’s account.

However, at some point, he started noticing that he was losing money (because his bank was converting the currency at a rather bad exchange rate for him).

So, he opened an account in EUR and started receiving money there. He began losing less.

Less, because previously, he was losing twice (once because someone converted the money from USD to EUR at their rate, and a second time when someone converted EUR to PLN at their rate). Now, he only lost in one place (USD → EUR).

We managed to catch this pretty quickly.

Finally, after all the necessary changes, finding the right partners, and making slight process adjustments, the client had a nice additional sum available in their cash flow. With his turnover, this resulted in a nice extra six-figure amount over a few months after implementing the changes.