Is your business taking advantage of recent uplifts in UK visitor spend?04th May 2017
Dynamic currency conversion (DCC, also known as cardholder preferred currency), multi-currency pricing (MCP) and tax-free shopping (TFS) have long been profitable sources of additional income for merchants. With the recent rise in UK visitor spend (up 39% year-on-year) – now is the time for merchants to ensure they are the main beneficiaries from such solutions.
Offered to customers at the point of sale, DCC allows foreign cardholders to choose whether to settle their transaction in GBP, or the native currency of their card. By moving the currency conversion away from the issuing banks, merchants can offer their customers full visibility of the exact amount they will be charged. MCP offers a similar solution (with the currency selection made upfront before payment) and is most often associated with eCommerce transactions. Tax-free shopping enables customers from a non-EU country to reclaim sales tax (VAT) collected by the merchant. Of these transactions, merchants are allocated a % of the additional income.
Following last year's EU referendum, the UK experienced a dramatic decline in the strength of the GBP. This has spurred growth in UK visitor spend that presents an immediate opportunity for savvy merchants. Merchants without DCC/MCP/TFS solutions in place are now missing out on vast amounts of income and additional marketing incentives.Wayne Ashall | Senior Consultant
For merchants with international spend solutions, under most revenue-share structures, when transaction volumes increase, suppliers receive additional income without having to exercise any further effort. This leaves significant opportunity on the table for merchants to take advantage of and maximise their income allocation and other ancillary benefits.
Is your business benefitting?
In the past few months, CMSPI has received a surge of interest from its clients to assist in scoping each area of potential international spend opportunity and have subsequently released hundreds of thousands of pounds back into merchant’s pockets.
Further, our extensive analysis into merchants’ DCC & TFS arrangements gives us a unique visibility to benchmark different suppliers’ charging structures (and revenue-share) and the impact this has on merchants’ profitability. Our market intelligence means we are able to provide insight to how merchants are obtaining additional marketing & loyalty benefits and an enhanced customer experience.
If you would like CMSPI to independently review your arrangements, please email us today at firstname.lastname@example.org to speak to one of our payments consultants.