The first big lesson in taking a payment system global is that most U.S. financial institutions have limited options among multicurrency credit-card settlement authorities--the providers that move funds from a credit-card holder's bank into the merchant's bank. In the United States, three services--Citibank, First Data Corp. and Paymentech--perform most credit-card settlements for online transactions, with Paymentech commanding the bulk of the business. These companies, along with credit-card processors, ultimately determine how many currencies are accepted for payments and which currencies can be deposited in merchant accounts.

So, even if a merchant is working with a third-party payment gateway service--say, a CyberCash or CyberSource--it is important to know about the service's settlement authority to determine the breadth of international business that is possible. Paymentech, for example, "accepts" purchaser payments in about 150 currencies (based on a relationship with NatWest), but limits merchant payments for Visa and MasterCard to eight, with 22 more slated for year's end. On the other hand, Paymentech promises to approve clients in one to three weeks--a process that merchants say can take as long as a few months if they deal directly with NatWest. (Current credit rules--which may be changing--tend to require merchants to have a presence in the geographic area where settlement occurs.)

Still, unless a merchant signs up with one of a new generation of online currency conversion service providers, it remains extremely difficult to present prices in local currency for overseas buyers. Merchants also remain subject to high international surcharges on credit-card transactions, and the number of currencies that can be deposited into the merchant's account upon settlement remains extremely limited.

The right currency-conversion model is very much a business-specific decision. For example, it may make sense for a U.S. company selling CDs to do daily catalog updates to present multicurrency pricing using a service such as U.K.-based WorldPay. But one business selling high-priced components to another probably doesn't want to hit its customers with constantly changing prices. Such a seller might build the risk of currency fluctuations into a price that changes monthly or even quarterly. For this merchant, it might make more sense to spend $35,000 for consulting and technology from a company such as Uniscape, and build a system that pulls in and changes currency rates at the merchant's discretion.

It's also important to know what banking interfaces in what countries are supported by payment gateway services (best used by merchants with fewer than 5,000 transactions per month) or payment software with direct interfaces from the merchant site to various credit-card networks. Today, just about as many merchants use payment services (such as CyberCash, ICOMS, CyberSource, or hosting provider systems from AT&T and Yahoo! Viaweb) as install their own software from providers such as ClearCommerce, CyberCash, VeriFone and PaylinX. Either way, most of these providers report that adding new banking interfaces is at the top of customer demands.

It's also becoming clear in global commerce that both the customer and the merchant need to know all the costs and regulations regarding an international shipment prior to purchase. Otherwise, unexpected landed-cost fees can leave both sides fuming over refused deliveries, and products left to collect dust in international warehouses.