We trialled shopify multicurrency starting mid-October 2023 when shopify rolled this out as a default.
I am now trying to reconcile payments for Q4 2023 and what a complete nightmare this is.
Shopify sold this as a way to reach new markets without losing out financially, completely omitting to mention that PayPal not only takes a huge cut on transactions which aren’t in your home currency, but also their reporting is so unhelpful that it is almost impossible to see what is going on with these transactions.
PayPal takes their transaction fee in the non-home currency and then takes another cut when converting the payment to your home currency.
E.g. we are in the UK, we made a sale worth AU$177 which shopify has converted to £92.48 at their exchange rate, this suggests we are not losing out by taking payment in AU$.
Customer paid by PayPal and they take their transaction fee of AU$7.19 so the net payment will be AU$169.81
On the shopify exchange rate we would expect to get £88.72 net from this transaction but PayPal have only sent us £85.42. This is a huge amount in extra fees and there is no way to get a clear picture of what extra fees you are paying because PayPal hide their foreign currency conversion fees and the only way I can see is by looking at each transaction individually.
I can’t even see the transaction fees in a transparent way because PayPal doesn’t include these in the statement, only a net amount from foreign currency transactions and no way to break this down into what is payments received and what is fees, so the true cost is well and truly hidden.
I am really unimpressed with this whole situation - I think shopify has behaved very badly in not making clear the implications for those of us who accept PayPal and suggesting that accepting payments in foreign currency would be cost neutral.
I don’t know yet how much we have lost through additional fees - shopify may try to say we will have gained sales by offering payment in local currency but it’s impossible to know whether that is so given the lack of transparency on fees with PayPal.
Just wanted to warn anyone else who is tempted to go down this route.
I honestly don’t think there is a solution unless you run your accounts in multiple currencies and directly reconcile each PayPal transaction which is not practical for most people.
Solution for us is to turn off multi currency shipping and make everyone pay in the base currency of our store.
Shopify - any help on this please as you obviously are pushing multi currency to increase sales but have been less than transparent about the costs in terms of additional PayPal fees and the ensuing nightmare in reconciling transactions/accounting?
Yes, I agree, some Shopify help here would be great.
To add to your point, there’s potentially a third option to fix the accounting problem.
If the options are to either reconcile each transaction for PayPal OR remove multi currency altogether, then the third would be to hide the PayPal option for foreign customers using a 3rd party app like HidePay.
We don’t love that idea since this is shifting the burden onto our foreign customers and potentially not allowing them to use the payment processor of choice.
Navigating payment processing fees and especially PayPal fees on an international basis can be a crazy headache, tell us about it, we have spent days diving into this ahhaha. Your breakdown of the problem was great, so I will only focus on talking about the solution.
When selling internationally, you have currency conversion fees and transaction fees. As described in your post, Shopify does not present you with all payment processing fees from the get go. Often, to find associated payment processing fees you need to go to settings, billing, select a billing fee and then try and find an order amongst the bundled fees. Obviously this is not scalable. Below you can see the breakdown you may see on Shopify:
Indeed, for a sale which originally had no fees on, there are actually quite a few involved such as payment processing, payment thresholds and exchange rates. This is all broken down in our CashDash block.
However, realistically do you really want to go order by order and check the fees? Sounds unscalable and pretty atrocious if you ask me. So, we took it a step further and regardless of where you are selling and how consumers are paying we automatically calculate the actual fees charged, based on the receipt, and convert them back to your home currency at the time of the transaction. We also calculate the currency conversion fee accurately, providing you with a clear picture of your finances. We then compile all this and show you the breakdown per country and total spend on payment processing and fees:
Sorry for the long ramble, but as you can tell, we are pretty passionate about the topic. We are currently testing our app and onboarding shops completely free with 0 commitment. I would love to connect if you are interested in talking further. DM me if interested and have a great day!
