eCommerce on the whole has surged over the past year, but the growth in online marketplaces has been particularly notable. Selling on these platforms is becoming more and more attractive to consumers and smaller businesses, as doing so allows sellers to reach a wider pool of potential buyers in various markets.
Standing out from other marketplaces requires offering payouts that are both quick and safe, however, according to Ben Edwards, CEO of used electronics digital marketplace Swappa. To this end, Edwards recently told PYMNTS buyers and sellers transact directly on Swappa’s platform, and disbursements are sent out at the point of purchase to individual sellers’ accounts via PayPal.
“We do a lot … to provide value, but we do not want to be a middleman that sits in between the buyer and the seller deal because that can, in a lot of cases, just add friction,” he said. “The fact that we facilitate payments direct from buyer to seller … reduces a lot of the friction and a lot of [the] time that it would take for the seller to get the money. … [As a seller,] it can be tough to, say, ship off $500 or $1,000 worth of product if you know getting paid for that is days away, and so we want the seller to [have] access to [those funds].”
Providing consistent payout experiences is a necessity for marketplaces as more businesses and individuals move onboard to buy and sell their goods. It is imperative for these platforms to stay abreast of sellers’ current payment needs and examine how emerging disbursement tools could keep them engaged.
Keeping Seller Disbursements Seamless And Secure
Edwards explained that most of the buyers and sellers transacting on Swappa are already used to swift payment experiences in other aspects of their daily lives. The company is assessing whether to offer other methods in addition to PayPal, he said, but any alternatives must offer sellers an equivalent level of speed and security.
“I think maybe some of the stresses of the pandemic have … raised the urgency level on just about everything, perhaps, but we have always considered it very important for our sellers to get paid for what they are selling as soon as possible,” Edwards said. “So as far as other payment options, that is something we consistently hear and are consistently evaluating: [whether there are] other ways to make money transfers between buyers and sellers easier. But for us, there always has to be a safety factor there.”
Payouts must be secure as well as speedy, especially as more fraudsters follow the throng of consumers flocking to marketplaces. Edwards said that Swappa still conducts the seller-vetting process manually, which is intended to help the company more thoroughly scrutinize applicants before their goods are listed to remove some of the risks of false listings and other forms of fraud. Offering secure seller payment methods is equally important. Edwards said that supporting mobile wallets and other swift payment methods can be an attractive prospect, but many of these tools do not come with the kind of robust fraud or seller protections that can keep these individuals protected.
“We prefer that the seller has the money in their account as they ship or before they ship,” he said. “We feel comfortable [with] and have a very good success rate doing that, in part because of all the steps we take ahead of time to try to prevent cases of seller and buyer fraud, that sort of thing. So where a lot of other platforms may take the approach of, ‘Well, we will have the money transferred, we will just disburse it at a later time after everything is out of the way,’ we have taken an approach of working very hard ahead of time to try to prevent fraudulent situations, [making it] hopefully a much smoother process for [the] buyer and seller to get the product and to get their money in as little time as possible.”
Facilitating speedy and efficient seller payouts will only grow in importance as businesses and independent sellers become more interested in listing or buying products on these platforms. Consumers and independent sellers have been familiar with eCommerce and online marketplaces for several years, but more businesses are beginning to filter into the digital marketplace economy — and they expect seamless payout experiences when they do.
Instant Payouts And The Rise Of The B2B Marketplace
Business-to-business (B2B) companies have also caught on to the convenience of eCommerce platforms in recent months. More of these firms are using marketplaces to find and offer products and to receive payments, prompting Swappa to launch its own B2B marketplace recently. B2B sellers are just as eager for quick disbursements as individual sellers, meaning marketplaces must work to swiftly support these payouts. Edwards said that marketplaces must consider businesses’ and consumers’ unique needs when it comes to disbursements, however.
“There is going to be … very different criteria for what makes a great payment, so to speak,” Edwards said. “With a person-to-person [payment], you have got two strangers transacting with each other over the internet, [so] the safety aspect of it … is going to be more important maybe than with two businesses transacting [for] very large purchases, [where] the fee factor is probably going to be more of a concern. If you have a $300 order, that 3 percent [fee] may not be that big of a deal, but if you have a $40,000 order, then that 3 percent is a lot more meaningful.”
Consumers and businesses alike are expected to gravitate toward digital marketplaces over the next few years, and sellers in both markets will continue to look for faster payouts that do not sacrifice security. Instant disbursement options are becoming must-haves for marketplaces as the eCommerce marketplace heats up.
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