We are building an online store to sell a software we developed.
We are Europe-based, so our we do our bookkeeping in EUR. Our only payment method, at launch, will be PayPal, linked to an account in EUR.
Based on experience with other apps (sold through the Mac App Store, where currencies are not a problem) we expect our customers to be from all over the world, but mostly from Europe (Eurozone and UK) and North America (USA and Canada).
So, we have different options:
- Use only euros at all time. So, we will display prices in € and have checkout in euros (we will pass the amount in EUR to PayPal and let them charge customers' credit cards in local currencies if they want). Price will be the same for all customers, but we'll have to charge VAT to european ones. Before checkout we may also give our users a "converter" suggesting the approximate amount in their local currency, if you think that's useful.
- The same as 1., but with USD instead of EUR (prices in USD, checkout in USD). We will still charge VAT to european customers.
- Localize currencies (supporting only EUR, USD and GBP, probably), so that the price in EUR is always updated to the equivalent in customer's local currency. Users will be asked to pick their currency from a list.
- Localize currencies, but with "fixed" conversion rates. So, for example, the app will cost 11.99 EUR (including VAT - or is it better to add it before checkout?) for european customers, 9.99 GBP (including VAT) for UK, 12.99 USD for rest of the world (VAT is not due).
Every solution has pros and cons:
- Easiest for us, and the less expensive (commissions for currency conversion are paid by customers). The price is unique, but may be confusing for customers outside Europe (I noticed that Americans, for example, often have no idea of how much an euro translates in dollars).
- We still have one single price, but being in dollars should be more "understandable" by anyone in the world (Europeans have generally a better idea of the exchange rate with dollar). However, this is much more expensive as we will have to pay all commissions (and customers outside the US will have to pay them too, since their credit cards will be billed in USD!).
- This is not as expensive as the one above. However, prices in currencies other than euros will be really floating, causing confusion in our customers' heads.
- This will solve the issue with floating prices on a daily basis, but in case of big changes in exchange rates our customers may think some are paying less than others.
With options #3 and #4 we also have the benefit of including VAT inside the price for Europeans. Since we are selling only to end-users and not companies, Europeans are used to see final prices, including all taxes. Since only Europeans will be allowed to pay in Euros or Pounds, everyone will see a final price (without more taxes).
So how should we display our prices so that they look more fair?