Everything you Need to Know About Shopify Multi-Currency

  • Strategy, Technology, International
  • September 10, 2019
  • by Alex O'Byrne
  • 12 minute read

There are many concerns when you expand into new countries, from international fulfilment quirks to foreign tax obligations.

The good news is that making your website international-friendly has become much easier in recent years. One example of this is Shopify’s multi-currency feature.

What is Shopify Multi-Currency?

Shopify multi-currency lets you choose the currencies you want to offer on your store, from a list of over 130 global currencies including:

  • Australian dollar (AUD)
  • Canadian dollar (CAD)
  • Denmark Krone (DKK)
  • Euro (EUR)
  • Hong Kong dollar (HKD)
  • Japanese yen (JPY)
  • New Zealand Dollar (NZD)
  • Pound Sterling (British pound) (GBP)
  • Singapore Dollar (SGD)
  • United States Dollar (USD)

Showing the right currencies

Throughout the customer’s purchase journey, from the homepage to checkout confirmation, customers can shop in their local currency. To show these currencies to relevant customers, merchants have a few options.

Letting the customer choose their currency

By adding a currency-switcher to your theme, customers can choose their preferred currency once landed on your store.

Example of Shopify Multi-currency on Astrid & Miyu

Detecting customers' locations

You can also build in geo-IP detection, which will automatically recommend the relevant currency for a customer, based on their browser preferences and location. Using this alongside a currency switcher means customers can easily change their currency with selectors, if they wish to.

Alongside others, Shopify have their own Geolocation app for this, although styling and customisation is limited.

The Shopify Multi-Currency back-end

When Shopify Payments and multi-currency are enabled, you will see a currency section once you go in to ‘Manage’ on Shopify Payments.

Shopify Multi-Currency Payment Providers | Shopify Agency

You'll then see each enabled currency:

Shopify Multi-Currency | Shopify Plus Agency

Setting currency conversions

When it comes to converting your currency qith Shopify Payments, you have two options: automatic currency conversion and manual exchange rate conversions.

Automatic currency conversion

With this first option, Shopify handles your currency conversion based on a daily FX rate. Note that this rate includes the Shopify Payments currency conversion fees and is subject to fluctuate daily. Shopify charges this small fee for every currency conversion, and it’s dynamically added on top of the converted price that the customer pays. This means it doesn't affect your margin, but does make your foreign currency prices slightly higher than the spot rate, so keep this in mind.

Manual exchange rate conversions

A second option that’s become available to merchants since July 2020, is to manually set exchange rates for their international currencies. This means specifying an FX rate in one place for each currency throughout your store. Setting your rates this way means they don’t vary unless you manually change them.

Price rounding

You can’t set ‘floor’ or minimum prices for each currency, but you can set rounding rules in each currency, which keeps your prices looking consistent even if they fluctuate day to day. The rounding options below are what you can set for each currency.

Shopify Multi-Currency Payment | Shopify Plus Agency New York

For example, if the store is in GBP £, you can set rounding rules for all other activated currencies. If you choose 0.95 for USD, the US dollar prices will always look like $5.95. Note that again, this is after the Shopify Payments conversion fee has been added.

In summary:

Base price x currency exchange rate + conversion fee + rounding rule = front end price

$10 x 0.81 (USD/GBP exchange rate) + 0.15% (example Shopify conversion fee) + 0.87785 (example Shopify rounding rule to 0.99) = £8.99 front end price for customer

A typical set-up for rounding might be:

  • EUR Round up to €0.95
  • JPY Round up to the nearest ¥100
  • USD, CAD, AUD, NZD, SGD, HKD Round up to the nearest dollar.
  • GBP Round up to the nearest pound.

Conversion charges

A final note on rounding is that the conversion fee is taken out before the rounding is done. A worked example:

  • Product price in-store currency (for example, USD) $10.00
  • Multiply by the currency conversion rate (for example, 0.867519) €8.68
  • Add the currency conversion fee (for example, 1.5%) €8.81
  • Apply the rounding rule (for example, round to €0.90) €8.90

This is how Shopify is charging you for currency conversion. You will need to factor this into your financial models and compare against alternatives for processing foreign currencies.

Getting paid out

Shopify will do the currency conversion for you before your payout, so you’ll receive your payout in the currency of the country where your store/business is located. Canadian businesses have the option for Canadian dollars (CAD) or United States dollars (USD). Danish businesses can be paid in either Euro (EUR) or Krone (DKK).

Shopify charge processing fees that vary depending on the card type and if it’s domestic or cross-border. You can ask for a breakdown of these from your Shopify Plus Sales Rep.

Can I have separate domains and subdomains for each currency?

As of September 2020, those using Shopify Payments can set additional regional domains and subdomains to display their store in the currencies (and languages) of specific regions. To do this, you can use both top-level domain(s) and further sub-domains.

For example, you might wish to configure a top-level domain, yourstorename.com, to show the currency and language of wherever the majority of your customers shop from. Say that’s the US. When using that domain, your store will appear in English and USD. Similarly, if a lot of your customers shop from Spain, you might want to set a subdomain of es.yourstorename.com. Again, this will show your store in Spanish and EUR.

Hreflang tags are automatically set up for all international domains, meaning when your international customers search for your store, Google will return the domain variation that’s specific to their location.

This makes for a slicker international shopping experience for your customers and helps your global sales.

Is Shopify Multi-Currency right for you?

We’ll help you decide with 7 simple tests.

1. Is Shopify Payments right for you?

To use Shopify multi-currency, you need to be using Shopify’s own payment gateway called Shopify Payments.

First of all, your business must be in one of the following countries: Australia, Austria, Canada, Denmark, Germany, Hong Kong SAR Chin, Ireland, Italy, Japan, The Netherlands, New Zealand, Singapore, Spain, Sweden, United Kingdom, United States (excluding US territories except for Puerto Rico.)

Advantages of Shopify Payments over a ‘normal’ gateway:

  • In-built fraud detection
  • You can use Shopify Pay which is an accelerated checkout similar to Apple Pay
  • Hassle-free automatic set up

Some drawbacks:

  • Relatively expensive compared to getting your own merchant account. Shopify Payments does offer a lot of features, so this needs to be offset against that.
  • 3D secure not yet supported - though it will be soon due to the Strong Customer Authentication (SCA), which is part of the PSD2 directive in the EU.

2. Can you live without price control?

Shopify lets you set rounding up rules as described above, but it doesn’t let you set the price floor. A lack of price control could be an issue whichever option you choose for currency conversion.

Automatic conversion price control Many brands can’t risk accidentally undercutting local retailers through automatic price fluctuations. If going automatic and this is an issue, you could consider using shipping rules to hedge against this, but that would rely on you watching currency changes and updating your rates to different countries accordingly.

Additionally, some businesses won’t like the idea of product prices changing day-to-day. Even with the price rounding, they might deem this to be too odd of an experience for their customers.

One more thing to note is that the currency conversion fee is included in any foreign currencies, which might serve to make them less competitive than other outlets where your products are sold.

Manual conversion price control For those setting conversion rates manually, you’ll have more price control, but this could still be an issue. For instance, some brands might wish to be able to follow manufacturers’ suggested retail prices for a product in a specific currency. But the manual conversion rate you set isn’t product-specific, it applies to all your products, meaning this wouldn’t be possible.

3. Are you wanting to learn more about your international customer base and their shopping habits?

Multi-currency is a great way to experiment with international selling without the commitment of a dedicated regional store. Perhaps your Japanese customers are comfortable checking out in USD but your Australian customers will always choose their local currency? Now you know you’re best placed to invest in an AUS store as well as a Japan-serving ROW store in USD.

Multi-currency can help you decide which direction your international strategy should go in with minimal commitment and development work. Once you know you have traction in overseas markets you can look at using a more robust and flexible multi-store architecture.

4. Is currency/abandoned checkouts really the problem?

Turning on multi-currency payments is not the be-all and end-all of successful international selling. It’s just one piece of the puzzle to help you understand what your global reach is, and use that information to expand.

Some other areas to consider in an international strategy include:

  • Do you have localised marketing strategies?
  • Do you accept local non-credit card payment methods?
  • Is your site multilingual?
  • Do you have competitive shipping rates?

5. You need multi-currency POS (Point of Sale) or draft orders

Shopify POS only uses your store currency. You cannot sell in multiple currencies in any Shopify channels, including the Wholesale channel, with Shopify multi-currency.

6. You don’t want Shopify to control when currencies are converted

Shopify will convert your foreign currency order revenue into your store currency at a spot rate, whether you use manual or automatic currency conversion.There are four risk areas that arise from this:

  • Manually captured payments: during the gap between authorizing and capturing the payment, the FX rate may have changed
  • Refunds: during the gap between charging a customer and refunding them, the FX rate may have changed
  • Chargebacks: during the gap between charging a customer and having to pay the chargeback, the FX rate may have changed
  • Chargeback resolution wins: if you get a chargeback and you win the dispute resolution, you’ll have the payment captured again at the current FX rate.

In all cases above, it can go either way. If the foreign currency gets stronger between authorizing and capturing the payment, for example, you will receive less in your base currency when you get your payout — and vice versa. It’s not necessarily going to be a bad thing... it’s just there’s a level of risk.

However you deal with multi-currency, this will be the case. It’s also worth noting that not being able to control when your currencies are converted might be more of an issue for huge brands; these may find it beneficial to keep currencies in a different bank account then clear them through a broker when the exchange rate is in their favour, as opposed to having it converted in smaller quantities, at points determined by Shopify. But again, this level of control could open yourself up to even more risk if you don’t manage your currencies properly...

7. You need to accept SOFORT payments outside of Germany

SOFORT is a payment method widely accepted online in Europe, specifically in Austria, Belgium, the Netherlands, Germany, Poland, Italy, Spain, Slovakia, Switzerland, France, United Kingdom, Hungary and the Czech Republic.

It works on Shopify but only in Germany. You can learn more about Sofort from Shopify here

Shopify now also supports iDEAL, a Dutch payment method. It’s only available to businesses based in the Netherlands

How to set up Shopify Multi Currency

Are you sold on Shopify multi-currency? Here are the basic steps:

  1. Sign up for Shopify Payments, if you haven’t already
  2. Enable multiple currencies in Shopify Payments
  3. View and set up your converted prices
  4. Add a currency selector to your storefront.
  5. Optionally, add geo-detection to locate your visitor and pick out the best currency for them
  6. Don’t forget to consider gift cards and discounts in multiple currencies.
  7. Test and launch

You can read Shopify’s official multi-currency instructions here.

What's the Alternative? Multi-Store.

Here at We Make Websites, most of our international clients will opt for a ‘multi-store architecture’ which looks like this.

Shopify Multi-Store Architecture | Shopify Agency New York

In this architecture, each currency is a separate Shopify Plus store catering to a geographical region. This gives you full control over how you set prices, payment options and basically everything you can think of to configure on a Shopify store. A typical setup as above might compromise:

  • UK store, GBP currency, at brandname.com
  • US store, USD currency, at us.brandname.com
  • EU store, EUR currency, at eu.brandname.com

An alternative might be to have a different EUR store for different languages you want to cater to.

As you’ve no doubt guessed, this also means maintaining several different stores. We add syncing apps and/or middleware to keep the stores inline so you aren’t having to duplicate effort on each store.

Some things do become more difficult when maintaining a multi-store architecture, such as installing apps on each store or keeping collections up to date. Product IDs are also out of sync between stores which could cause problems with apps that work across your stores.

On the other hand, multi-store also provides the benefit of being able to merchandise differently for each region.

We have an in-depth post on using Shopify Plus for selling internationally, which covers multi-currency, translation, fulfillment, tax and warehousing.

Multi-currency or Multi-store?

As we’ve discussed above, there are 7 tests for if you can use Shopify Payment’s multi-currency feature. It’s a great step towards an international strategy and it will work for a large number of e-commerce businesses.

For more complex businesses that want full control over their international presence, we can help develop an international multi-store architecture that will give you global reach with local optimization.

Try out a Shopify demo to see how it all works or reach out to our experts to discuss further.

*This post has been updated since the initial publish date to reflect the changes to manual exchange rate conversions and international domains.


Authors

Alex O'Byrne

Alex is Co-founder at We Make Websites, the go-to Shopify agency for global commerce. We Make Websites design, develop and optimise e-commerce websites for the fastest growing brands on the planet, with teams in London and New York. Alex is an international speaker on ecommerce, brand and business growth.


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