What to Look For in a Multi-Currency Payment Gateway

If you’re an e-commerce merchant, a multi-currency payment gateway can equip you with a portal to global sales and increased reach for your online business. But it’s not enough to simply choose an international payment gateway that supports a wide range of payment methods for domestic and foreign customers. There are several other important features to keep in mind to ensure a seamless and secure payment experience.

PCI Compliance

The first standard that a global payment gateway must meet is PCI-DSS Compliance. This stands for “Payment Card Industry Data Security Standard” and is a global standard that is managed and enforced by the PCI Security Standards Council.

In order to be PCI compliant, a payment gateway must:

1. Use and maintain firewalls
2. Use proper password protections
3. Protect cardholder data
4. Encrypt transmitted data
5. Use an antivirus solution
6. Maintain properly updated software
7. Restrict access to data
8. Have unique IDs for access
9. Restrict physical access
10. Create and maintain access logs
11. Scan and test for vulnerabilities
12. Maintain appropriate document policies

Online merchants are responsible for maintaining PCI compliance and can be liable for exorbitant fines if a customer’s secure data is stolen. When you outsource this role to an international online payment gateway provider, this third-party provider takes on the responsibility for maintaining PCI compliance on your behalf.

Secure Encryption

As per #4 on the list of PCI Compliance requirements, any data that is transmitted through your payment gateway needs to be encrypted securely. This is essential for preventing account data breaches that could have catastrophic consequences for your business.

The technology that web servers use to scramble important information (such as credit card numbers) for secure transmission is commonly referred to as Secure Sockets Layer or SSL. Technically, the most updated version is Transport Layer Security (or TLS), but the term SSL is still used to cover both of these certificate types.

SHA-256 SSL Encryption

When reading the specifications of a multi-currency payment gateway, you should be able to see exactly which SSL signature is being used to encrypt your customers’ secure account data. Here, “signature” refers to the algorithm used to hash information into an encrypted form that cannot be read or modified by hackers.

At Unicorn Group, we use SHA-256 SSL encryption, which meets the most recent standards established in 2016. The “256” in the signature means that there are 2²⁵⁶ possible hashes that can be generated by the algorithm — that’s more than there are grains of sand in the world.

Fraud Scrub

Offering a multi-currency payment gateway opens you up to international customers but also to international fraud. The best payment gateway for international transactions will provide a fraud scrub security feature that works around the clock to block fraudulent purchases while providing the flexibility to adjust your parameters.

How Fraud Scrubbing Technology Works

Fraud scrub technology acts as a filter to block problematic transactions before they occur. As the technology doesn’t know each individual purchaser and whether they are a genuine customer or not, it uses a set of predetermined rules to decide which transactions to block.

In the case of an action that is considered suspicious, the fraud scrub can perform one of three protocols:

1. Flag the transaction
2. Stop the transaction
3. Block the card number

These parameters can be set by the merchant and changed or adjusted at any time.

Why It’s Important for Fraud Scrub to Be Adjustable

Rule-based filtering sounds great. However, there are cases in which genuine customers might perform actions that are flagged as suspicious for numerous reasons. Consider the following real-life scenarios:

• A customer enters a shipping address that doesn’t match the billing address because they are purchasing a product as a gift.
• A customer enters the wrong billing address multiple times because they are trying to remember which address they registered with their bank.
• A customer purchases a large number of products to take advantage of a seasonal discount.
• A customer is making a purchase from a flagged country because they are enjoying some online shopping while they travel abroad.
• A customer is making a purchase with a bank card from a flagged country because they have moved overseas permanently and still wish to purchase from you.

When fraud scrub settings are too rigid or restrictive, you may lose all of the above transactions and miss out on a significant amount of income (not to mention losing valuable repeat customers). The best payment gateway for international transactions will allow you to decide which risks you’re willing to take and change the parameters for specific situations. For example, it might:

• Set higher purchase thresholds for customers who tend to make large orders.
• Raise the purchase thresholds temporarily for a seasonal discount or special offer.
• Allow transactions from a “high-risk” country temporarily to accommodate a known customer who now lives overseas.
• Flag transactions with a different shipping and billing address rather than blocking these transactions outright.
• Block specific card numbers rather than blocking all cards from a country or continent.

Global Capacity

Many of the problems associated with an overly restrictive fraud scrub can be eliminated if your multi-currency payment gateway is set up to handle transactions from a large number of countries around the world — including those deemed as “high-risk countries.”

In general, countries considered “low-risk” include:

• The U.S.
• Canada
• Australia
• E.U. countries
• Japan

By default, every other country is automatically considered “high-risk” — simply because these countries tend to display higher rates of fraudulent activity and/or have more restrictive laws when it comes to purchasing and importing international goods.

The best payment gateway for international transactions will accept multiple countries and currencies at the same time as ensuring protection from international fraud. Unicorn Group currently processes debit and credit card payments from customers in 195 countries using 164 forms of currency.

Chargeback Mitigation Tools

Chargebacks occur when a transaction has been processed and is then subsequently reversed — by the cardholder, the merchant, or the cardholder’s bank. When your company regularly processes payments through an international online payment gateway, the card networks you work with and your acquiring bank will monitor the number and ratio of chargebacks and apply sanctions if you exceed the threshold.

Chargeback Thresholds and Common Sanctions

Mastercard and Visa are the leaders when it comes to monitoring and punishing chargebacks. Both of these card networks allow up to 100 chargebacks per month or a 1% total chargeback-to-transaction ratio. Your acquiring bank may have thresholds that are lower or higher than these figures.

Depending on which network you use, you may be placed on a monitoring program if you get close to the monthly limit for chargebacks. These programs may include higher (and rising) fees per chargeback and/or a timeframe for lowering your chargeback ratio in order to avoid being placed on the industry blacklist.

Common Reasons for Chargebacks

Chargebacks are divided into three main categories:

1. True Fraud

These are transactions that are processed using a card that was physically stolen or digitally hacked. They account for around 10-15% of chargebacks. This category also includes cases of identity theft. In cases of true fraud, the merchant is liable for the chargeback.

1. Friendly Fraud

Friendly fraud occurs when the cardholder disputes the charge. This kind of fraud accounts for 60-75% of chargebacks. Friendly fraud can happen when:

• The customer is dissatisfied with the product or service.
• The customer is trying to get the product for free.
• The customer wants to return the product but the return process is too difficult.
• The purchase was made by a family member without the cardholder’s permission. This is known as “family fraud.”

In all of the above cases, the merchant is considered liable for the chargeback unless they are able to prove that the customer was at fault. If your chargeback ratio is too high, this is the first category you’ll want to reduce.

1. Merchant Error

The third reason for chargebacks — and the easiest to avoid — is an error on the part of the merchant. This category accounts for 15-35% of chargebacks and can easily be prevented with adequate quality control. Merchant errors can include:

• Duplicate charges
• Incorrect transaction amount
• Invoicing errors
• Failure to process refunds in a timely manner

In all of the above cases, the merchant is held liable for the chargeback.

How Your Payment Gateway Can Help Prevent Chargebacks

A quality multi-currency payment gateway should be able to minimise and/or lower your chargeback rate in several ways — each of which is essential for remaining in good standing with card networks and your acquiring bank. These are the ways in which Unicorn Group works to mitigate chargebacks:

1. True Fraud

Our built-in security features, SSL encryption, and fraud scrub work to protect your customers from identity theft and hacking. Even more specifically, our gateway blocks IP addresses with a history of fraud and/or initiating chargebacks.

1. Friendly Fraud

Our payment process verifies the identity of the cardholder during checkout so that you have the evidence you need in the case of family fraud. Our gateway also works to block chargeback attempts initiated by the customer.

1. Merchant Error

Our international payment gateway includes detailed quality-control measures that should prevent most kinds of merchant error — including duplicate charges, transaction errors, and failure to process a refund in time.

By minimising your chargeback risk, we help you to protect your business from significant financial loss.

A Multi-Currency Pricing Model

To provide the optimal shopping experience and minimize customer frustration, you must provide transparent pricing for every currency you accept. As an extension of that, your gateway should provide accurate currency conversions that account for exchange rates and foreign transaction fees, thus avoiding disputes and ensuring an optimal customer experience.

Cross-border transactions can be tricky, but as long as you’re clear about the conversion rates and currency exchange rates, and as long as your gateway accurately processes transactions at those rates, you should be able to minimise any disputes.

Convenience & Support

Finally, a multi-currency payment gateway should offer features that make your life easier. These include things like:

• Easy and quick integration
• Short total setup time
• The ability to sync across multiple devices
• Real-time data visualisation
• The ability to scale as your business grows
• Compatibility with major shopping cart providers
• The ability to pay affiliates, resellers, and employees
• A user-friendly customer database
• The option for recurring billing cycles
• 24/7 customer service
• No hidden fees

Choosing the Best Gateway for Multi-Currency Payment Processing

When you understand the features that are essential for international currency processing, it’s much easier to find an international online payment gateway that meets the needs of both your business and your customers.

When each customer is able to use their preferred currency and payment method, you can multiply your sales many times over — and the right payment gateway and payment processor can get you there. It’s a little work to get set up at the start, but the rewards will be well worth the effort.