E-commerce: The challenges of a global market
Electronic commerce offers relatively easy access to foreign markets and a pool of billions of customers, but at the same time poses significant challenges:
- Using competitive and stable exchange rates to price in a foreign currency, while protecting your margins by hedging those rates
- Keeping your cost of sales in foreign currencies under control, regardless of exchange rate fluctuations, so that your margins are protected.
- Reducing payment service providers & high currency conversion fees by implementing more efficient currency conversion methods and processes.
- Paying your suppliers efficiently, so you can maintain a healthy relationship with them and goods are delivered faster.
Currency management for e-commerce
An appropriate foreign currency strategy for a multinational sector such as e-commerce should impact on three key areas:
Automation of foreign currency needs
Managing foreign currency exchange through an API plug-in integrated into the e- commerce platform. This allows you to automatically hedge the foreign exchange rates you use, so you can implement more stable and aggressive pricing policies and increase conversion and revenues
Efficient FX and payment platform
A technological solution that gives access to benchmark exchange rates with transparent pricing. E-commerce companies can centralise payments to providers and easily hedge their cost of sales. In the long run, lower FX costs and more efficient processes can translate into a significant competitive advantage.
International transfers featured with SWIFT messages, a universally accepted proof of payment. This is a key element to step up the shipping process, substantially reducing delivery time and providing a trustworthy system to trace the funds throughout the payment process.
“For a growing start-up such as Animalbox, it is a real asset to enjoy as good FX and payment conditions as much larger companies”