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Insights and Expertise

Are issuers losing More recently, multi-currency pricing (MCP) has gained
traction. Unlike DCC, MCP allows for currency localization
the FX game to throughout the entire online journey, not just at the point
of checkout. This approach aligns well with the growing
demand for seamless, cross-border shopping experiences
merchants like Uber? and has become feasible thanks to advancements in digital
shopping platforms and content management systems.

Airbnb has been an early adopter, refining its currency
localization approach over several years (see https://www.
airbnb.co.uk/help/article/95). According to PSE's recent
survey of major digital merchants, nearly two-thirds
already offer currency localization, and many others are
planning to invest in the near future. The enthusiasm for
currency localization among digital merchants and PSPs
is only growing.

What MPC means for U.S. acquirers

For merchant acquirers, the rise of multi-currency
pricing (MCP) signals significant new opportu-
nities—and challenges. As digital merchants in-
creasingly adopt MCP to localize pricing across
global markets, acquirers are uniquely positioned
By Chris Jones to guide and support these efforts.
PSE Consulting Unlike dynamic currency conversion (DCC), MCP

he buy now, pay later (BNPL) revolution trans- is integrated throughout the entire customer jour-
formed consumer credit by allowing merchants ney, which can help acquirers strengthen mer-
to absorb credit costs to boost conversions and chant relationships by offering more sophisticated
T increase basket sizes. Now, a similar disruption FX solutions that deliver measurable value.
may be emerging in the foreign exchange (FX) space, and
credit card issuers are feeling the heat. Acquirers can capitalize by partnering with FX
specialists to provide seamless MCP capabilities,
Recently, Uber introduced a new currency localization including rate management, reporting and settle-
service aimed at improving user experience for ment services. They can also develop value-added
international travelers (see https://bit.ly/44xg3xk). The tools that help merchants monitor performance,
premise is straightforward: When a British tourist lands in manage FX risk and optimize conversion rates—
New York, they want to see their Uber ride prices in GBP, critical for merchants eyeing global growth.
not USD. To cater to this preference, Uber now charges a
1.5 percent markup for currency conversion—an offering However, acquirers must also be prepared to
likely to spark debate, but also one that presents a clear navigate technical complexities, such as inte-
value proposition. grating MCP into merchant platforms and en-
suring compliance with local regulations. Edu-
Why? Because according to research from PSE, UK credit cating merchants on the clear benefits—higher
card issuers currently mark up FX rates by an average of conversions, customer satisfaction and potential
2.94 percent. Suddenly, Uber's 1.5 percent markup looks FX revenue—will be key to driving adoption.
like a bargain.
As large platforms like Uber and Airbnb set new
A quiet revolution standards, more merchants will expect their ac-
quirers to keep pace. Those who step up now can
The idea of merchants capturing a slice of the FX margin secure a stronger foothold in the lucrative cross-
isn't new. For years, dynamic currency conversion (DCC) border ecommerce landscape, offering services
was the primary tool for merchants looking to monetize that go beyond payments to become true enablers
FX. However, DCC has several drawbacks: it requires of global commerce.
explicit consumer opt-in, adoption rates rarely exceed 20
percent, and revenue has to be shared with acquirers and
FX specialists.
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