At first glance, eCommerce platforms are made for the global economy. They are extensible, cross borders and rely on digital means to bring buyers and sellers together to get goods displayed, advertised and available on a worldwide stage.
But behind the browsing and the buying lies a wealth of complexity.
Platforms (and the merchants selling on those platforms) need to consider logistics and shipping and fulfillment. The back office teems with complexity, where consumer-facing websites and order forms ultimately lead to invoices. Consumers pay into the platforms, the platforms disburse funds to the sellers, and no two markets (or currencies) are the same.
Ryan Vestal, chief financial officer at ClickBank, and Jim Cho, executive director, technology segment business development, merchant services at JPMorgan Payments, said that bringing eCommerce to a truly global stage means implementing the right international growth and FX strategy while offering a broad range of localized payments — with the aid of technology, of course.
The conversation with PYMNTS’ Karen Webster came against the backdrop where ClickBank and JPMorgan have cooperated in recent months to apply an integrated multi-currency solution to ClickBank’s, which promises a better end experience to consumers and simplifies the transaction.
ClickBank operates as an eCommerce platform and affiliate marketplace for entrepreneurs and online brands, with tens of thousands of sellers and affiliates spanning over 150 countries and accepting payment in 30 different currencies. In terms of the platform’s own operating model, the marketplace affiliates earn commissions by using the ClickBank platform to promote their offerings.
“We have the very last person who buys the product that the seller is selling, but even closer to us, we have the seller who comes to our platform, wants to sell their product,” Vestal said. “And the affiliates who promote the seller’s product to get a cut of that transaction.”
Related: JPMorgan Sees ‘Cash Flow Magic’ Inside Automated Payments
Market-by-Market Challenges
The merchants themselves face the challenges of having to maintain bank accounts in each country in which they operate. ClickBank bundled and embedded its foreign exchange capability and merchant services solutions on its eCommerce platform, using a multi-currency solution to reduce foreign exchange volatility.
At the center of it all, perhaps to no surprise, lies the payment itself.
“For international customers,” Vestal told Webster, “the experience is different than it might be in the U.S. There are several considerations tied to foreign currencies — and to the currencies you may or may not want to offer.”
Pricing can vary between the invoice and the email that winds its way to the consumer. Additionally, exchanges offer a new raft of challenges, as refunds need to be processed in reverse fashion.
That’s no easy task, given the fact that opening a bank account can be relatively easy in some countries and an administrative minefield in others. In some cases, noted Vestal, regulators require that firms also maintain a physical presence in a given country.
Cho stated that offering payments locally in a country lets a merchant reduce cross-border considerations. But with ClickBank, he said, there exists a “staged” approach with their current legal entity offering localized content. After that comes the localization of currency, and layered over that is the integrated FX solution.
See also: JPMorgan Taps AI, Real-Time Data to Make Cash Flow Transformation a Reality
Offering payments in the consumers’ own local currency eliminates friction in the purchase and any ambiguity in the transaction amount, contributing to a better consumer experience. ClickBank has expanded into exotic currencies, which are less-traded and less-prevalent on the world economic stage — but offer value in many markets when returns or exchanges are in the offing.
The streamlined matchups between currencies removes a level of uncertainty out of FX conversions and “locking in” prices, as JPM handles the FX complexities and rates amid transactions that are relatively short lived in duration.
The streamlined nature of the FX piece of the puzzle is especially valued in split shipments where some products may ship later based on availability, with settlement taking place much later than when the transaction was initiated.
As Cho said to Webster, “The North Star for eCommerce has always been about having a local presence. However, implementing our multi-currency solution with ClickBank is a great example how we helped through an advisory approach around FX strategies and risk management, but then also take that strategy and execute it in a seamless manner through technology.”
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