E-commerce has revolutionised global business, allowing brands to sell across borders with ease. Platforms like Amazon, Shopify, Wix, WooCommerce, and BigCommerce empower businesses to build and manage online stores. While these platforms differ in features, they share a common pitfall: currency conversion fees.

These fees may not seem like much at first, but for businesses processing international sales, they add up quickly. Whether charged directly by the platform or indirectly through a payment processor, the average cost of converting profits into a local currency hovers around 2%. This hidden cost can mean thousands of pounds lost every year for e-commerce brands.

The good news? There are ways to take back control of your money and stop losing it unnecessarily.

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What Does This Actually Mean for Your Business?

Let’s break it down. As an e-commerce business, you likely receive payments in multiple currencies. If you withdraw these funds into your local currency—be it GBP, EUR, or USD—your platform or payment processor applies a hefty conversion fee. These fees are often higher than rates offered by specialist FX providers, eating up your hard-earned profits.

For example:

• Shopify charges 2% for currency conversions if customers pay in a different currency than your store’s default.
• Amazon uses a tiered system for its currency converter for sellers:
  • 1.5% fee for revenues under $100,000 (~£80,000).
  • 1.0% fee for revenues over $500,000.
 
• WooCommerce and BigCommerce rely on payment processors like PayPal or Stripe, which apply their own 1-2% currency conversion fees.
• Wix and Squarespace pass conversion responsibilities to customers’ banks, so we know you’re losing around 2% plus fees!

The Real-World Impact:

Let’s look at two international brands that not only do we love but have taken the E-com world by storm!

The first business that caught our attention is Odd Muse, a UK-based slow-fashion womenswear brand founded in 2020 by Aimee Smale. Known for its chic pop-ups in London and New York and a global customer base, Odd Muse reported a turnover of £5.2million in 2023. A quick search shows Odd Muse uses Shopify, which means they could be paying significant currency conversion fees.

How Much Are They Losing?

If 40% of Odd Muse's sales come from international customers (a conservative estimate for global e-commerce),they could be processing £2 million in foreign payments. At Shopify’s 2% conversion fee, that’s £40,000 lost annually—a substantial hit for any business. That’s money that could be reinvested into new collections, expanding their pop-ups, or enhancing their online experience for customers.

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And Odd Muse isn’t alone. Consider Castore, the sportswear brand that’s become a global powerhouse. With a turnover of £115 million in 2024 and rapid international growth, their foreign sales likely account for a large chunk of their revenue. If just £50million of that is in other currencies, they could be losing £500,000 annually at a 1% conversion rate.

How Can E-commerce Brands Mitigate FX Fees?

The good news? There are simple ways to reduce these fees and keep more of your hard-earned revenue.

Here’s how Odd Muse—and other e-commerce businesses—can reduce these unnecessary losses:

1. Set Up Multi-Currency Accounts
       Platforms like Shopify allow merchants to link accounts in multiple currencies. This means you can receive payments directly in USD, EUR, or CAD without converting to GBP at a high fee. From there, you can choose when to convert the money and get better rates elsewhere.
2. Use a Specialist FX Provider
       FX brokers offer competitive exchange rates, sometimes as low as 0.5%, compared to the 1-2% charged by e-commerce platforms and payment gateways. Many also provide multi-currency accounts, allowing you to hold and transfer funds in the currency of your choice.
3. Time Your Conversions Strategically
       Currency rates fluctuate daily. With the right tools or advice, you can convert funds when rates are most favourable, saving even more money.
4. Analyse Your Payment Gateway Options
       Some gateways charge lower fees for international payments or offer more flexibility in how funds are converted. It’s worth shopping around to find the best fit for your business.

The Bigger Picture

E-commerce businesses globally are losing out due to high currency conversion fees. Here’s a quick snapshot of what these fees look like across popular platforms:

Lets review it by platform and compare their currency conversion fees and the impact on £500,000 revenue:

Shopify - 2% - £10,000 lost

Amazon 1.5% - 1% (tiered by volume) - £5,000 lost

WooCommerce - 1-2% (via payment gateways like Stripe) - £5,000-£10,000 lost

Wix - Customer bank handles conversion - 2%+ fees lost

BigCommerce - Payment gateways like PayPal apply fees - £5,000-£10,000 lost

The solution is simple:

Don’t let these platforms control your currency conversions. Instead, let us over at BLK.FX help you understand these losses and tailor the best FX solution for your business so you can take full control of your international revenue.

For businesses like Odd Muse and others generating between £100,000 and £1,000,000 annually, the savings could amount to tens of thousands of pounds per year—money better spent growing your brand.

It’s time to stop losing profits to unnecessary FX fees and start maximising your potential.