Your SaaS product costs $99/month in the US. You expand to India and charge ₹7,300/month (direct currency conversion). Sales are terrible. Indian customers say it's too expensive—local competitors charge ₹3,000.
Simple currency conversion ignores purchasing power parity, local competition, and perceived value. International pricing requires strategy, not just math.
Here's how to price your product globally without leaving money on the table or pricing yourself out of markets.
Why Direct Currency Conversion Fails
$99 USD is not equal value globally:
Purchasing power differences:
$99/month represents:
- US: ~0.15% of median household income
- India: ~1.5% of median household income (10x higher relative cost)
- Switzerland: ~0.05% of median household income (3x lower relative cost)
Same absolute price, wildly different relative affordability.
Competitive context varies:
US: Competitors price $79-$149
India: Local competitors price $30-$50
Your $99 positions you as expensive in India, mid-market in US.
Value perception differs:
Enterprise markets (US, Western Europe): Higher willingness to pay for software
Price-sensitive markets (India, Southeast Asia, LatAm): Lower software budgets, expect lower prices
Currency fluctuation risk:
Customer pays $99, but local currency weakens 20%.
Their cost increased 20% without any value change.
International Pricing Models
Model 1: Global Pricing (USD everywhere)
What it is: Single USD price globally, customers pay in USD
Pros:
- Simple to manage
- No pricing arbitrage
- Consistent positioning
Cons:
- Currency risk borne by customer
- May be unaffordable in some markets
- Perceived as US-centric
- No local price optimization
When to use:
- Early international expansion
- Enterprise/high-value products
- Global buyers (not local SMBs)
- Developer/technical products
Example: GitHub (historically USD globally)
Model 2: Currency-Equivalent Pricing
What it is: Convert USD price to local currency at current exchange rate
Pricing:
- US: $99/month
- EU: €89/month (roughly equivalent)
- UK: £79/month (roughly equivalent)
Pros:
- Simple to implement
- Removes customer currency conversion
- Appears locally relevant
Cons:
- Ignores purchasing power
- Doesn't account for local competition
- Still may be expensive in some markets
When to use:
- Similar purchasing power markets
- When local competition is comparable
- When you want consistency
Example: Many SaaS companies in early international expansion
Model 3: Purchasing Power Parity (PPP) Pricing
What it is: Adjust pricing based on relative purchasing power
Pricing:
- US: $99/month (baseline)
- Western Europe: $95/month (similar PPP)
- Eastern Europe: $49/month (lower PPP)
- India: $30/month (much lower PPP)
- Australia: $105/month (higher PPP)
Pros:
- More affordable in lower-income markets
- Competitive with local pricing
- Expands addressable market
Cons:
- Complexity in managing multiple price points
- Risk of arbitrage (buy cheap, use expensive)
- May need different packaging by market
When to use:
- Price-sensitive SMB/consumer products
- Expanding to emerging markets
- When local alternatives exist
- High-volume, lower-ACV products
Example: Spotify, Netflix (regional pricing)
Model 4: Value-Based Regional Pricing
What it is: Price based on value delivered and competitive context in each market
Pricing approach:
- Research willingness to pay in each market
- Analyze local competitive pricing
- Adjust based on local value perception
- May include different packaging
Pricing:
- US: $99/month (competitive mid-market)
- Germany: €119/month (premium positioning, higher enterprise spend)
- UK: £89/month (competitive with local players)
- India: $35/month (value tier, competitive with local)
Pros:
- Optimized for each market
- Competitive positioning by market
- Maximizes revenue opportunity
Cons:
- Most complex to manage
- Requires significant market research
- Potential pricing arbitrage
- Different packaging per market
When to use:
- Mature international presence
- Significant market-by-market differences
- Resources for market research and testing
- Can prevent/manage arbitrage
Example: Adobe, Salesforce (sophisticated regional pricing)
The Pricing Decision Framework
For each market, evaluate:
1. Purchasing power
Calculate relative income:
If US median income = $60K India median income = $6K
Price sensitivity = 10x higher
$99/month in US feels like $990/month in India
Adjust accordingly: Maybe $30-40 in India
2. Competitive landscape
Research local competitors:
Tools:
- Web scraping their pricing pages
- Customer interviews (what else are they considering?)
- Sales calls (what prices are prospects comparing?)
If local competitors price $30-50, you can't price $99.
3. Customer segment
Enterprise vs. SMB:
Enterprise buyers (global): Less price-sensitive, higher budgets, buy global tools
Can charge consistent global pricing
SMB buyers (local): Price-sensitive, compare to local alternatives, limited budgets
Need local pricing
Your strategy may differ by segment.
4. Product category maturity
Mature category (CRM, email marketing): Customers know what they should pay, strong local alternatives
Need competitive local pricing
New category (novel AI tool): No local alternatives, educating market
Can charge premium, less need for local pricing
5. Value delivery
Does value differ by market?
Same value everywhere: Project management, collaboration
Can justify consistent pricing
Different value by market: Payroll (different complexity by country)
Price differently based on value
Preventing Pricing Arbitrage
If you have PPP pricing, customers might buy cheap region and use in expensive region.
Prevention strategies:
1. Billing address verification
Require:
- Credit card with billing address in region
- Company address verification
- IP address monitoring
If address is UK but buying India pricing, block or flag.
2. Regional product variants
India tier:
- $30/month
- Excludes some enterprise features
- Limited to Indian payment methods
US tier:
- $99/month
- Full features
- Global payment methods
Different packaging prevents direct arbitrage.
3. Contract terms
For enterprise:
- Contract specifies region of use
- Audits to verify usage location
- Penalties for violations
4. Regional locking
Extreme measure: Product only works in region purchased
Netflix does this: India subscription doesn't work in US
Reduces customer flexibility, use carefully.
Currency and Payment Methods
Currency to charge:
Best practice: Charge in local currency for that market
Why:
- Removes currency conversion friction
- Customers see price they'll actually pay
- Feels locally relevant
How: Payment processors (Stripe, Adyen) support multi-currency
Exception: Developer/enterprise products can charge USD globally if that's norm
Local payment methods:
Beyond credit cards:
Europe:
- SEPA bank transfer
- iDEAL (Netherlands)
- SOFORT (Germany)
Brazil:
- Boleto (bank slip)
- PIX (instant payment)
India:
- UPI
- Net banking
- Wallets (Paytm, PhonePe)
China:
- Alipay
- WeChat Pay
Japan:
- Konbini (convenience store payment)
- Bank transfer
Missing local payment methods = lost sales.
Example: Shopify supports 100+ payment methods globally because local methods matter.
Pricing Communication
How to display pricing:
Transparent (show all regional pricing):
Pros:
- Customers see you price fairly by region
- No hidden pricing
Cons:
- Highlights price differences
- May cause arbitrage attempts
Example: Spotify publicly shows different pricing by country
Geo-detected (show pricing based on location):
Pros:
- Customer sees relevant pricing only
- Less price comparison
Cons:
- Less transparency
- VPN users might see wrong pricing
Example: Most SaaS companies (show pricing based on IP/location)
Selector (let customer choose region):
Pros:
- User control
- Transparency
Cons:
- Invites arbitrage
Regional landing pages:
US site: example.com - shows USD pricing
UK site: example.com/uk - shows GBP pricing
India site: example.com/in - shows INR pricing
Most common approach for B2B SaaS.
Testing Regional Pricing
Don't guess. Test.
Step 1: Research (before launch)
Customer interviews: "What do you currently pay for similar tools?" "What would you expect to pay for this?" "At what price does this become too expensive?"
Competitive research: What do local competitors charge?
Step 2: Set initial pricing
Based on research, set initial price:
- Not lower than research suggests (leave money on table)
- Not higher than research suggests (kill conversions)
Step 3: Launch and measure
Key metrics:
- Conversion rate (vs. home market)
- Average deal size
- Sales cycle length
- Churn rate
Compare to home market benchmarks.
Step 4: Test and iterate
If conversion rate low:
- Price might be too high
- Or messaging/value prop unclear
Test:
- Price decrease
- Different packaging
- Better value communication
If conversion rate good but deal size low:
- Consider upsell tiers
- Or premium offering
Iterate based on data.
Common Pricing Mistakes
Mistake 1: No localization
Charging USD everywhere, customers do currency conversion themselves.
Result: Friction, price confusion, lost sales.
Mistake 2: Direct currency conversion without PPP
$99 → ₹7,300 without considering Indian purchasing power.
Result: Unaffordable for target market.
Mistake 3: Ignoring local competition
Pricing based on US competitors when local market has different pricing.
Result: Overpriced vs. local alternatives.
Mistake 4: No arbitrage prevention
PPP pricing with no controls, customers exploit price differences.
Result: Revenue leakage.
Mistake 5: Too many price points
Different price for every country, impossible to manage.
Better: Regional tiers (NA, EMEA, APAC, Emerging) not 50 country-specific prices.
Regional Pricing Examples
B2B SaaS Example:
Product: Marketing automation platform
Pricing strategy: Value-based regional
Tiers:
North America:
- Starter: $149/month
- Professional: $499/month
- Enterprise: Custom
Western Europe:
- Starter: €139/month
- Professional: €469/month
- Enterprise: Custom
India/Southeast Asia:
- Starter: $49/month
- Professional: $149/month
- Enterprise: Custom (starting lower)
Different starting points based on purchasing power and competition.
Consumer SaaS Example:
Product: Productivity app
Pricing strategy: PPP-based
Individual plans:
- US/Canada/Australia: $9.99/month
- Western Europe: €8.99/month
- Eastern Europe: €4.99/month
- Latin America: $4.99/month
- India/Southeast Asia: $2.99/month
Makes product accessible globally while maximizing revenue.
Getting Started
Month 1: Research
- Customer willingness to pay research
- Competitive pricing analysis
- Purchasing power analysis
Month 2: Strategy
- Choose pricing model
- Set regional pricing tiers
- Define arbitrage prevention
- Select payment methods
Month 3: Implementation
- Set up multi-currency billing
- Create regional pricing pages
- Implement payment methods
- Train sales team
Month 4+: Test and iterate
- Launch in test market
- Measure conversion and metrics
- Adjust pricing based on data
- Roll out to additional markets
International pricing is part art, part science. Research local markets, test your assumptions, and iterate based on data.
Price to win in each market while maintaining global consistency and profitability.