To get around the problem, those Web-based merchants that are big enough set up US-based shell companies. Fine if you have the resources. Smaller players are forced into convoluted and contorted processes such as charging in US dollars, converting to New Zealand currency at this end and then converting back to US dollars at the purchaser’s bank.
As one Kiwi online software vendor told me, the customer may end up with a different value on their statement to what he originally charged depending on how the exchange rate has performed over the duration of the transaction. Basically he finds the whole business to be a right nuisance but he has to put up with it as the majority of his customers are from overseas. So here is an exporter, bringing money into the country, but struggling with our antiquated banking systems.
It’s a problem that has been hanging around for some time. About 18 months ago there was an outcry from New Zealand online retailers because they were unable to take payment from overseas customers in anything but New Zealand dollars.
Those chasing North American and European customers felt that having to charge in Kiwi currency was a barrier to making the sale. Let’s face it, there are probably only slightly more people in the world who have heard of the New Zealand dollar than of the Maltese liri or the Slovenian tolar. Would you be comfortable buying from a site charging in such obscure currencies?
At the time Visa and MasterCard (which are owned by the same company) copped flack as it was said they were not allowing the banks to acquire transactions in non-domestic currencies.
However, this turned out not to be the case. Visa International said the banks were free to acquire US dollar-based (or other currency) transactions in their own country and it was a matter of them modifying their systems.
Daniel Jeffares, Visa International’s New Zealand manager at the time, described the required system change as relatively simple. “They would need to make a change to allow them to process the transaction without currency conversion,” he said.
Both ASB Bank and BNZ said they were glad that Visa and MasterCard had cleared up the confusion and they would get on to solving the problem. As at November 1998, both banks were investigating ways to process payments over the Internet in US dollars and other currencies.
A year later not much had changed. Former IT Minister Maurice Williamson and former Enterprise and Commerce Minister Max Bradford criticised the banks for holding back
e-commerce in New Zealand after receiving complaints from Web-based retailers. I rang around the banks again and was told that although they were working on the problem, Y2K compliance was getting in the way.
Fast forward and here we are in 2000. Y2K has sunk beneath the waves and businesses are back to the usual challenge of how to remain competitive. A quick ring around the banks to find out whether anyone would be offering a multi-currency credit card product anytime soon left me feeling pretty much in the same position as two years ago.
ASB Bank was the only company to get back to me and reported that they are still working on the project. BNZ, Countrywide and ANZ didn’t reply to my query.
WestpacTrust’s public relations person couldn’t see a problem to begin with. “If I buy from a US site I’m charged in US dollars, if I buy from a UK site I’m charged in UK currency, New Zealand sites charge in New Zealand dollars — why is it a problem?” Well, maybe she’s happy to spend in unfamiliar currencies but most New Zealand e-tailers don’t believe their off-shore customers feel that way.
The banks say there are many considerations to take into account. If it’s so complex how come New Plymouth ISP and host Web Farm is able to offer a system that does the job, the same one used by the National Westminster Bank in the UK?
The banks say it’s a matter of time. The question is how long does New Zealand have?
Andrea Malcolm is Computerworld’’s news review editor, phone 0-9-377 9902. For publication copy letters to email@example.com.