Multi-Currency Payment Gateways: How They Can Increase Profitability and Business Valuation

As an entrepreneur, you don't need to be told how important it is to increase profitability. You want to hit the ground running with your new start-up and have avenues to explore as you grow and develop your company. However, with Forbes stating that most businesses don't break even-let alone make a profit-in the first 12 months, what can you do to increase profitability and ensure that you're not another failed statistic, citing cash flow as the reason for your demise?

One way to boost profitability-and indirectly enhance your business's valuation-is by accepting multi-currency payments. This involves using a multi-currency gateway, a system that allows you to accept payments in different currencies and convert them to your preferred currency. This post will delve into the benefits of this system, how it can improve profitability, and why it's increasingly relevant in the context of business valuation.

Reduced Transaction Costs
Returning to the cash flow issues, numerous costs, fees, and outgoings can erode profits or tie up your cash flow. Your payment process is one such cost that can silently add up if you're not watching it closely. multi currency payment processing eliminates the need for multiple bank accounts or paying excessive currency exchange fees. You can streamline your payment system, consolidate transactions, and reduce costs-directly improving your net income, which is a critical metric in most income-based business valuation models, such as the Discounted Cash Flow (DCF) method.

Faster Clearance Times
No more waiting for international wire transfers to be approved or for currency conversion delays. Multi-currency gateways typically speed up the settlement process, giving you quicker access to your revenue. This increased liquidity improves short-term financial stability and allows for reinvestment in growth. A business with strong liquidity and healthy cash flow will usually receive a higher valuation due to its ability to meet financial obligations and fund expansion without relying heavily on external financing.

Greater Customer Satisfaction
Not everyone wants to have to convert payments before making a purchase, and this can often be a laborious or even costly process for the customer. However, enabling payment in the currency of their choice means they only need to jump through hoops to make a payment. They can do so quickly and easily without having to convert to their currency to understand what they are paying or check if they have enough in the bank to make the payment. It's still a good idea to thoroughly check what payments your merchant offers to ensure they meet your needs and appeal to your customer base and to ensure you get the full benefit.


Fraud Protection
Fraud is a significant problem, particularly in industries such as online retail, where it is a frequent occurrence. Fraudulent activities can erode your profits and damage your reputation, impacting your ability to retain customers or attract new ones. Plus, you're losing money by accepting fraudulent transactions, which can result in the loss of products, services, and potentially the funds used to pay for these. The right solutions can mitigate this risk by identifying fraudulent activities or highlighting risks and implementing protections to safeguard your business.

Boosted Reputation
Reputational risk is something all new and existing businesses need to be aware of, as the damage can be instant. If you lose your reputation, it's a long and hard road to climb back up if you are ever able to do so. A lack of reputation hinders growth and creates significant barriers to your plans. And the more customers you lose, the more limited your opportunities going forward, the less likely you'll be able to increase profitably and sustain growth as you wanted to, as you are focusing on damage control and rebuilding your reputation instead of expansion plans, which can seriously hinder you.

Multi-currency payment processing is designed for your convenience and ease of use. The smooth transactions and increased security it offers to your customers make it an attractive option. By providing this convenience, your business is positioned where it needs to be, solidifying your reputation and giving your customers peace of mind. This support allows you to plan for growth with confidence, knowing that you can make payments with ease, regardless of their origin.

Want to see it in action? Air Europa, an airline offering flights across Europe, North America, South America, Central America, North Africa, and Asia, discovered that the integration of a multi-currency payment processor of the app could allow them to play process in the user's currency of choice making it easier for people to identify the correct price and understand how much the flight would cost. By delivering more accurate relationship costs, Air Europa was able to improve the usability of the app, enhancing customer satisfaction and making the booking process as seamless as possible. It has seen profits steadily since its integration in 2023.

In conclusion, while multi-currency gateways are primarily viewed as a tool for convenience and cost-saving, their real power lies in how they impact your bottom line, improve operational performance, and enhance your company's value in the eyes of stakeholders. If you're building a scalable business with long-term growth in mind, investing in smart payment infrastructure isn't just a financial decision-it's a strategic one.