

Ask HN: Which Currency to charge in? - willheim

First a bit of background:
I'm a Canadian, living, operating, and incorporated in Canada who will be charging $X/month for my service.  Monthly expenses such as hosting are all US based and charged in $USD.<p>When it comes to charging should I tow the GAP and charge in $USD or go for $CAD?  Only advantage to me in charging in $CAD is that I avoid currency fluctuations on the revenue stream as opposed to charging in $USD and converting to $CAD.  For those who do not realize it, the $CAD is around $1.04USD right now whereas it has been as low as $0.65USD in the past decade.  So as you can see, from a cash-flow management perspective, a bad exchange rate could be quite damaging to the business (OTOH a great exchange rate could be a boon).<p>To other Canadian operations:  What do you do to manage the currency fluctuations?
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anigbrowl
Charge USD. Anytime I see a bill in CAD I immediately start worrying about
conversion rates and possible customs charges, and if I can get the same thing
for within 5% by doing a USD transaction I will.

~~~
willheim
Funny... I live with the conversion issue almost every day. Something we
Canadians (and I suspect everyone doing online transactions) have just gotten
used to. That said, every barrier to an acceptance is one I want to eliminate.
Thanks for the input!

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anigbrowl
I don't mean to say that it's a rational objection! Apart from a couple of
annoying customs charges (because the sender didn't fill out a form correctly,
forcing me to pay import duties on already-taxed goods bought from Canada), I
have never had any actual problems purchasing from Canada rather than within
the US. And for that matter, I'm not even American myself, so it's not based
on some unfounded fear about the outside world. I've just gotten lazy and
begun to assume that there will be some sort of unforeseen additional cost
later, or that relative currency values will have drifted since the last time
I looked and I will wind up paying more than I anticipated, or...something. If
I'm hesitating over it, I'm guessing a good many more are.

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sycren
If you were using paypal then it would allow the user to pay in any currency
and in a way increase the target audience and wouldn't possibly put a buyer
off.

If you are worried about currency fluctuations, would it be possible to have a
US bank account which profit would enter which would then be used to pay for
anything US based therefore decreasing risk when converting $CAD to $USD? If
so, then you would only transfer money to $CAD when the currency rate falls
into a certain range for example 0.95-1.xx

~~~
willheim
So are you suggesting different amounts depending on the currency and the
location of the enquiry IP? Example: $30CAD, $30USD, 18EUR, 2600Yen?

That's something to think about. Have you done that or know a service that
has?

~~~
sycren
Sorry I have not done anything like this before. Through paypal, I meant that
you would charge say $10CAD on your site, when the user logs in to their
account, the charge is automatically charged in their currency. But this wont
be displayed on your site, only a figure of $10.

It really depends what kind of a service you are giving, in what quantity and
how often you need to transfer it back home. For example paypal and many
credit card companies take a small percentage of the transaction. Google
checkout is another solution to this. If you only transfer the money once per
quarter then you may save money when converting currencies

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HerraBRE
I'm operating from Iceland (<http://pagekite.net/>), and decided to simply let
the user choose: I offer prices in USD, EUR and ISK. The prices are roughly
comparable, but I don't bother making them match exactly - exchange rates
fluctuate too much and I figured it was more important to be user-friendly by
offering stable, understandable prices in a currency the user is comfortable
with.

We launched so recently that most of our users are still working through their
trial period, so I haven't actually gotten many sales or much feedback on the
system yet. So I can't say how well this is working in practice.

I'd love to know if people here think this is a good or a bad strategy, and
why.

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ashleyw
As someone who lives in the UK, I almost see dollars as monopoly money, I just
can't easily interpret the value properly. For example, if something I wanted
was $10, I'd snap it up, whereas if it was £5 (~$8), I'd think twice. You'd
think it would be the other way around given that each pound is worth more
than a dollar, but I guess you just give greater value to the currency you use
everyday.

Though I wonder, would you generate more sales selling a product for £6, than
you would selling it for $9? And could you switch your pricing from $9 to £9
(~$14.71) and maintain a similar conversion rate?

~~~
willheim
Businesses do that every day. Look at the price of a book which often has two
or more currency prices on it. Of course, what happened here in Canada is that
stores started offering discounts or "US Pricing" models when our dollar went
up. If we're to nitpick we're talking physical items which have associated
local costs involved (local staff, local vendor space leases, local energy
costs, etc.) whereas here we're talking electric bits and bytes. However, in
sales and conversions, it's all the same... no?

I have to admit, I was looking at Grahl Software's PDF Annotator which is
listed at $69.95USD but when I went to the site it said C$79.95 (using my IP
to give me a price). Did I convert? No. I was turned off. That's 19% more
expensive than if I used a US IP. I've a feeling, only from my own experience,
that different currency prices in a flat-earth internet environment is a big
turn off for consumers.

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fleitz
If most of your costs are USD and most of your clients want to pay USD why not
open a USD account with your bank and be done with it?

Figure out the most fluctuation you could handle and put a note in your TOS
that you will adjust the pricing based on USD/CAD exchange rates if they go
outside of a certain window. Alternatively, you could bypass this calculation
and just purchase a CAD futures contract from your bank.

Seriously, worry more about getting customers than how the USD/CAD exchange
rate will vary over the next year or two and you'll do fine. It's more likely
that the CAD will go to .80 than 1.20 because Canada exports 80% of it's goods
to the US and a devalued currency is better for exporting countries.

