November 4, 2013, 2:41 PM

Local options

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Cleverbridge charges a per-transaction fee based on a retailer's average order size and sales for translation, currency conversion and most payment methods. It charges an additional fee for Konbini payments from Japanese shoppers and Boleto Bancário in Brazil. It declined to disclose its fee except to say there is not a set range and it works to establish fees separately with each client.

Voxy, which sells online foreign language courses, also turned to a vendor to help it offer more options to the 90% of its customers who live outside the United States, mainly in Latin America, says Aron Grossman, the retailer's chief financial officer and vice president of corporate development.

The retailer, which launched in 2010, recently began using vendor BlueSnap Inc. as its payments processor in part because it has established relationships with local banks in Latin America that eliminates the need for Voxy to set up merchant accounts with numerous financial institutions in the region.

In Brazil, for example, which is Voxy's largest market, up to 15% of transactions are paid for using Boleto Bancário and more than 90% of credit card payments are made with local payment cards, meaning Voxy needed to use a payment processor or merchant acquirer that had a relationship with local banks. About 5% to 10% of Voxy's customers in Mexico opt to print an invoice for their online courses and then pay at their local Oxxo or 7-Eleven convenience store.

"We started out just taking credit cards and PayPal," Grossman says. "But then we realized that in places like Brazil, people wanted to pay in different ways. As a startup, we don't have the resources to go open a bank account in each country. We needed someone who could do the heavy lifting." BlueSnap's fees start at 2.9% plus 30 cents per transaction, according to its web site.

Grossman says it took a couple months to implement BlueSnap as its shopping cart and payment processor. It has only been about a month since Voxy added the service so Grossman says he doesn't have robust data to share as far as sales or conversions rate increases from foreign shoppers. But he says he has noticed that Voxy's number of credit card declines for foreign transactions has dropped since implementing BlueSnap.

When deciding to add foreign payments options, retailers should consider their size, resources, margins and product categories to determine if it is better to use a vendor as WinZip and Voxy did, or go it alone, which was the path iHerb took, experts say.

Companies like Cleverbridge and BlueSnap have an advantage in that they help retailers quickly accept many currencies and payment options from shoppers in multiple countries. For example, BlueSnap accepts 110 payment types in 60 currencies. And many vendors enable retailers to choose one or a few international payment types and add more quickly at their leisure.

However, McCarthy of iHerb says he chose to go direct for a few reasons, including processing costs and time. "As an intermediary they add a fee to the transaction cost," McCarthy says. "And as an intermediary there is additional time added to the transaction settlement period. In our market, margins are generally thin and when you add in the factor of shipping internationally, processing cost and time to settle are critically important."

Smaller retailers may find that vendors like Cleverbridge and BlueSnap are the best fit, he says, while retailers with a large footprint may choose to go direct to secure lower fees and typically faster settlements. "Transaction volume influences savings," he says. "The more transactions you process, the larger the savings."

For iHerb, the speed and costs of adding new currencies and payment methods depends upon the route. "In our experience the largest challenge is the banking coordination of settlement and exchange rates," McCarthy says. "The technology side is actually very smooth."

Whether going it alone or using a vendor for help, successfully selling to foreign customers requires understanding how they want to shop. E-retailers that take the time to add local payment options are finding in most cases that it's worth the effort.



Chexx, Inc. (
Chexx provides payments processing, check issuing and prepaid card options to international e-retailers in over 60 countries. Learn more.

PacNet Services Ltd. (
PacNet allows online retailers to offer international consumers the option to pay in their own currency, while receiving payment in the currency of the retailer's choice. Learn more.

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