Accept Credit Cards in US dollars
In today’s world a business’ best customers may not be located across the street or even across town but rather in an entirely different country. For Canadian businesses quite often the country is the United States and for that reason it may make sense to accept credit cards in US dollars. Doing so can have a significant benefit for both a business and its customers.
What does it mean exactly to accept credit cards in US dollars? In simple terms it means the entire transaction is conducted in US dollars. The card holder is billed in US dollars, the merchant is funded in US dollars and the merchant’s processing company bills their fees in US dollars.
Let’s consider the benefits of processing in a single currency from the customer’s (cardholder’s) point of view. The first benefit is it provides cost certainties, meaning I buy $1,000.00 worth of merchandise from a merchant selling in Canadian dollars I am uncertain if I will be billed $990.00 or $1,100.00 as the final price I pay is contingent upon the exchange rate my credit card company uses. The second benefit builds upon the first and that is it is much easier to reconcile my books if I am not trying to tie the amount I expected to pay for an item with the actual amount I was billed for the item.
From the merchant’s point of view the benefits to accept credit cards in US dollarsare equally compelling. The primary reason, especially if the merchant is attempting to do the currency conversation, is a reduction in charge backs. To illustrate – I as a merchant sell product to a customer in the US but as I do not have the ability to charge for my product in US dollars I convert my Canadian pricing to US dollars. My product sells for $990.00 US but I actually bill $1,000.00 Canadian. If my customer is billed for an amount different than the $990.00 US I quoted, I as the merchant, risk a chargeback. (The difference in the final price would be the result of the customer’s bank using a different exchange rate than the one used to calculate the $990.00 US selling price.)
The second benefit to a merchant in processing in US dollars is the ability to effectively reach the US market via an E Commerce strategy. Selling and billing in US dollars ‘masks’ the fact the business is actually not located in the US. This can help to reduce lost sales due to potential customers not understanding what an item will cost and/or being reluctant to do business with a Canadian company.
The ability to accept credit cards in US dollars is potentially a great way for a business to increase sales to the United States. The set-up process is quite simple – a US dollar specific merchant number, a US dollar specific POS/gateway solution and a US dollar bank account. With the requirements being so simple what are you waiting for?
