Shopify cross-border collections conundrum: How to set up Shopify local currency payments for a specific country (e.g. UAE)?

Setting up Shopify local currency payments is a boss problem. "Why do I have such a high bounce rate on my standalone site?" "Why do customers run away when they reach the payment page?" -- This is probably a soul-crushing question that many Shopify cross-border sellers encounter. Especially when exploring new markets, you may have carefully optimized your ads, product pages and logistics, but ultimately fell on the "payment" doorstep. Recently, a popular discussion in the official Shopify community shed some light on this issue, and we've taken this as our guide to give you an in-depth analysis of the reasons behind and the ultimate solution to how to set up local currency payments on Shopify for a specific country.

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Issue background: a UK seller's collection dilemma in the Middle East marketplace

Let's take a look at a real-life example of a UK-based Shopify seller looking to tap into the UAE marketplace. His store uses Shopify Payments on the backend, and the base currency is the British Pound (GBP). When customers in the UAE place an order on his site, they see the price of the product automatically converted to AED by Shopify Markets, but at the final checkout, they are forced to pay in GBP (British Pounds).

This leads directly to three fatal problems:

• Poor customer experience: Customers have no idea of how many dirhams they will ultimately have to pay, adding to the uncertainty and mistrust of shopping.
• High hidden costs: The customer's bank charges a significant fee for currency conversion and cross-border transactions, an "unexpected" expense that often leads to customer complaints and even chargebacks.
• Soaring abandonment rates: Faced with complex currency conversions and unknown fees, a large number of potential customers choose to abandon their shopping carts at the last second before payment.

This UK seller's dilemma is really epitomized by every Chinese seller using Shopify to expand into non-local currency regions. Whether your store is based on the US dollar, Hong Kong dollar, or euro, you're likely to run into the same payment barriers when trying to sell into emerging markets like the Middle East, Southeast Asia, or Latin America.

Core reason: Shopify Payments isn't a panacea

Many sellers mistakenly believe that by turning on Shopify Markets, they can allow customers in any country around the world to pay in their local currency. But the root of the problem is thatShopify Markets is responsible for "displaying" the local currency, while your Payment Gateway is actually responsible for "processing" the money.

The culprit is Shopify Payments, which, despite the convenience of its Stripe integration, has a strict whitelisting restriction of which currencies can be processed by "stores in different countries". In the above case, for example, the list of currencies supported by Shopify Payments for a United Kingdom (GB) account doesn't even include the UAE Dirham (AED).

So even though Shopify Markets displays the prices perfectly as AEDs, when it comes to checkout, Shopify Payments will show its hand and say, "Sorry, I don't recognize this currency, please pay in British Pounds (GBP), which I do recognize."

That's the heart of the whole issue:There is a mismatch in capabilities between front-end presentation (Markets) and back-end processing (Payment Gateway).

How to Set Up Shopify Local Currency Payments

Understanding the core reason, the solution is clear: we need to enable a "third-party payment gateway" for this particular market (e.g. UAE) that can handle its local currency (e.g. AED). It's like having a dedicated cash window for your store in a specific area.

Step 1: Create and Isolate Target Markets with Shopify Markets

This is the basis of all operations. Make sure you've set up your target market correctly in the Shopify backend.

1. Go to the Shopify backend -> "Settings" -> "Markets".
2. Create a new marketplace, e.g. name it "Middle East Marketplace" and add the United Arab Emirates to it.
3. In the settings of this marketplace, enable the local currency AED so that visitors from UAE IPs can see items priced in AED.

Step 2: Find and apply for a third-party payment gateway that supports the target currency

This is the most crucial step. You need to look for payment providers that clearly support your "store country" and support the "target market currency". For the UAE market (AED), a few quality options mentioned in the community include:

• Checkout.com. International mainstream payment gateway with very friendly support for the Middle East.
• 2Checkout (now Verifone). Veteran payment service provider with wide coverage is the alternate choice for many cross-border sellers.
• Stripe (separate account). Note that this doesn't refer to Shopify Payments, but rather you go directly to the Stripe website to apply for a standalone merchant account. Standalone Stripe accounts usually support a wider range of currencies than Shopify Payments.

You need to go to the official websites of these payment service providers to complete a registration and qualification check (KYC) to ensure that your account can receive AED payments properly.

Step 3: Activate Third-Party Gateways for Specific Marketplaces in Shopify

Once you get the account for the third-party payment gateway, go back to the Shopify backend and configure it.

1. Go to Shopify backend -> "Settings" -> "Payments".
2. In the "Supported payment methods" section, click "Add payment methods".
3. Search by the name of the service provider (e.g. "Checkout.com"), find it and follow the prompts to enter your API key and other information to activate it.
4. The most important step: Once activated, go back to the Markets settings and enter your Middle East Market. In the Payments tab, you will see all the payment gateways for your store. From here, you can enable Checkout.com, which you just added for this marketplace alone, and disable Shopify Payments (since it doesn't support AED).

Once the above configuration is complete, when customers in the UAE check out, Shopify will automatically direct them to pay using Checkout.com, and the entire process will be done in AED, silky smooth.

Expert Tip: If your business involves multiple emerging markets and you need to manage multiple third-party payment gateways, complex pricing rules, and shipping strategies, configuring them manually can become tedious and error-prone. At this point, consider using a specialized marketplace management plugin to simplify the process.

A guide to avoiding the pit: a few things you must know before implementation

• Transaction fee structure: With a third-party payment gateway, you pay two fees: a transaction fee charged by the gateway itself (usually ranging from 2.9% - 3.5%), and a platform transaction fee charged by Shopify (usually 0.5% - 2% depending on your package). This fee must be factored into your pricing costs. The Shopify platform transaction fee can only be waived if you upgrade to the Shopify Plus package.
• Withdrawal and Settlement: Understand the settlement cycle and withdrawal rules of third party gateways. Do they settle to your gateway account in AED or do they automatically convert to your store's base currency? This affects your cash flow and exchange rate risk management.
• Fully tested: Once configured, be sure to use a VPN to switch to an IP address in the target country (e.g., UAE) and simulate the entire process from browsing to ordering and paying to ensure that the payment process is error-free.

Frequently Asked Questions (FAQ)