Citi Perspectives 2024 E-commerce Edition

Scott Damassa Global Head of Sales for E-Commerce, Technology, and Communications, Citi Treasury and Trade Solutions | 5 In the first part of this edition of Citi Perspectives, we explore how to drive success in e-commerce, across payments, liquidity management and risk and controls —while keeping an eye on new technological and financial infrastructure innovations that could benefit the company in the future. Payments are crucial to e-commerce success; companies need a seamless payment system that lets them transact anytime, anywhere. A digital-first strategy with a global, constantly connected, 24/7 network is key to delivering the best experience with every single transaction. Whether it’s instant payments, cross-border transactions, commercial cards, tax compliance, or invoice management, companies need to keep pace with the future while managing the present. The rise of new payout strategies To this end, in this edition we look at how companies are revamping their payout strategies. Paying gig economy workers and customers quickly and transparently can be a real challenge. While payment acceptance has advanced, B2C payouts lag behind. Traditional methods like ACH and checks often create friction for both companies and recipients, making it hard to attract and retain freelancers, drivers, content creators, and other gig workers. Additionally, businesses need efficient systems for paying consumers directly, including for refunds, rebates, and incentives. We also investigate the potential of account-to-account payments through open banking. While open banking is already a big deal in the EU, the UK and many other countries around the world, takeup in the U.S. has been slow. A proposed Consumer Financial Protection Bureau rule is set to change that. E-commerce firms should get ready to tap into open banking’s advantages — a secure, cost-effective alternative to traditional payment methods that benefits both consumers and merchants. Ensuring smooth integration into the customer experience will be key. The need for robust liquidity structures The rapid pace of e-commerce and the speed with which digital native companies can growmeans that traditional liquidity management often doesn’t meet their needs. As our article notes, companies need robust and scalable liquidity management structures to ensure they don’t lose first-mover advantage when they enter newmarkets. But while speed is of the essence, putting the right structure in place from day one is important in order to reduce long-term burdens, optimize costs, and facilitate scalable operational growth.