Online marketplaces are leaving hundreds of billions of dollars on the table by failing to offer real-time, digital payment options, a new report finds.
COVID-19 has provided a massive booster shot to the digital economy, with consumers and businesses alike increasingly relying on online marketplaces to buy and sell everything from groceries to cleaning supplies.
Sixty-two percent of small businesses — and 78 percent of individual sellers as well — are turning to online marketplaces to find new customers, according to “In The Marketplaces As Retail’s New Front Door: What Sellers Need To Thrive In This New Digital World,” a new report by PYMNTS.
Working with Visa, PYMNTS surveyed 1,049 sellers on the use of online marketplaces by both individual sellers and businesses and what can be done to improve cash flow issues that remain a significant drawback to some of these services.
But while interest in online marketplaces is growing explosively, the report also offers a warning as well.
As a result of sluggish payment systems, many sellers who rely on these online marketplaces to do business are open to making a switch if a competing marketplace were to offer real-time settlement.
As it stands now, the average business waits three days for funds to settle after making a sale, with small businesses and individual sellers waiting two days. At a time when many businesses large and small struggling with liquidity and cash flow issues, the wait times are a significant source of discontent.
Sixty-three percent of small businesses told PYMNTS that they would be willing to switch marketplaces in order get faster access to sale proceeds, with 61 percent of individual sellers also expressing interest in a potential switch.
That amounts to $129 billion to $216 billion in sales that could be up for grabs by online marketplaces that offer real-time, digital payment options, the report finds.