The Magento platform is an extensible and flexible platform. In its current avatar, it has significant multi-lingual, multi-currency, and multi-platform capabilities. At this juncture, let us discuss the native Magento currency options, which can be expressed using three different possibilities.
This will be different from the one in which they will be charged. However this currency is merely for evaluation purposes, since the customer will still be charged in the base currency. However, customers certainly will get an idea of the approximate amount that the website will charge after conversion.
The better part about this option is that the conversion rates can be easily pulled from a conversion rate service, or even entered manually in the admin. In case these rates are pulled from the external service, they can be set to be updated automatically on a daily basis. This type of currency suits especially those merchants who have a majority of sales in one country, and have a simple option for other countries which make for a minority of their sales.
There are quite a few ways to modify prices in Magento. The native Magento Community Edition, requires you to set a price on a product at the default level. The platform also allows you set a website specific price. The options also include several elements such as special pricing and customer group pricing along with tiered pricing, catalog price rules and shopping price rules.
All of these prices combine along with any other pricing modifications to form the product’s final price. This final price is the total price of the product itself and it excludes things such as shipping and tax and other discounts that are applied to the entire order.
In this case, both the base price and the display (converted) price are stored on the cart. Both these processes are transferred to the order at the time of checkout. Now, it is worthy noting that when the only display currency is also the base currency, the base price is always the same as the display price.
Magento website developers make it possible to use both these prices throughout the life of the order. Here, the display price is primarily used for display to the customer, while the base price is used primarily for calculations.
In many cases, Magento is set to use a different conversion rate. In cases where it is set to use a conversion rate other than 1, the base price is converted to the display price before performing any calculations. This is followed by all other calculations that are simultaneously performed by using identical operations to arrive at the final totals for each price. This is done by working on both the base price and the converted price.
In this case, it is important to understand that the final display price total could vary by a cent or more. How much the value differs actually depends upon the number of line items that are included in the calculation – although this should never be more than a few cents. When an order is placed by the customer, they will be charged the calculated base price total converted.
This will be done by the payment processor, into the customer’s currency. However, this is not the way in which the base price is calculated. In this manner, the display price total will only give the customer a close approximation of what the charge will be in their native currency. This is in no way an exact representation of the actual charges.
This aspect about using multiple base currencies may be a bit confusing at first. This is because it does require that the person who imports products is thorough. Hence, there need to be a strategy in place for implementing products with multiple base currencies. This needs to be done before these are published to a live production environment.
At this juncture, it is necessary to understand the importance of being thorough in a situation wherein there are multiple base currencies. In this situation, consider a scenario where a internationally run company in the United States has a large customer base in the UK as well as Europe. For these regions, the websites will be opened in Euros and GBP as their website’s respective base currencies.
The merchant also sets up general shopping cart price rules for all websites giving customers 10 off product A when purchased with product B and 5 off product C, when the buyer puts it into a cart where the cart totals 100 or more. If this process is followed, then some interesting things happen. Customers browsing through the new British as well as European websites will find that the price of the product has the same value numerically on these websites.
This means that if the product’s cost is $ 200, then the price that is being displayed on the US website will be $200. However, the price that is displayed on the British website will be GBP 200 and that on the European website will be Euro 200. This is something irrational and is obviously inaccurate, this happens even if you have currency rates set up.
The rational is that in case a website has a different base currency, it should have a different base price as well, in order to go along with that different base currency. This different base price can be set by having a product in multiple with a different website level price for each website. Alternatively, the e-merchant can have a separate product that is exclusive to each website.
a. Multiple shopping cart price rules.
b. Converted into percentage based rules.
c. Accepted as different value on each website.
While writing these rules, you will realize that some of these rules are logically similar. However, the most important thing that you can realize while using base currencies is that you cannot simply assume that your configured prices as well as rules will work as you have expected. On the contrary, each area of the admin, where you have entered a price, should be evaluated for consistency with the new multiple base price structure.
Experienced e-merchants using the Magento platform will understand that Magento has a few ways of dealing with currency conversion. However, it is important to consider the implications of the fact that customers are paying in a currency that is not the default installation base currency of your Magento platform. There are various alternatives and work-around to this fact.
a. Using PayPal express as a primary or only payment method on websites that happen to default to a display price other than a base price. Thus, Paypal will display to the user what they will be charged in their currency.
b. Use a third part of a custom solution that uses multiple base currencies. For example, you could use a currency conversion automator. This will allow the merchant the increased functionality as well as usability that comes with using multiple base currencies. This is bundled with a lot of convenience of utilizing multiple display currencies. This extension makes it possible for the merchant to enter a default price for a product and 1 or more website level prices. The extension then uses a set of rules to convert the prices using one of the manually set currencies, and then rounds the price to make the prices look consistent across the entire website.
This solution has certain limitations, but it is a brilliant example of combining manual nature of using multiple base currencies with the simple and automated nature of display price currency conversion.
a. choose to ignore currency conversion alltogether,
b. use currency conversion with display prices, or
c. introduce multiple base currencies and go ahead to accept the extra incurred overhead. Thus, we can summarize that the issue of using multiple currencies on a website should not be considered lightly. However, it should be approached from a strategic perspective. This will allow for long-term maintenance of the solution, nevertheless providing sufficient and enough functionality to both the merchant and the customer online.
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Minal Joshi is a content marketer at Krish with a flair for eCommerce and Digital Commerce aspects. She is a MarTech fanatic with a knack of writing with which, she helps brands to curate, create, & commence digital brand positioning. Sharing insights via articles, case studies, eBooks, Infographics, and other forms of content creation is what she lives for. Being an ardent traveler, when not writing, you'll find her sipping coffee into the mountains or petting a stray.
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