While retail has never been an easy business, the shift from analog to digital retail over the last decade or so has made it incredibly challenging in many ways.
In an interview held shortly before the launch of PayPal for Marketplaces, PayPal’s chief operating officer, Bill Ready, told Karen Webster that shift has also created a massive opportunity for the retailers, consumers and the commerce ecosystems that have emerged over the last decade.
Narrowly speaking, it’s been a big opportunity for PayPal, which has seen its user base swell to 218 million active users and 17 million merchants worldwide, as reported in its Q3 earnings. More broadly, it’s been a massive opportunity for merchants to tailor, personalize and perfect the level of their game, according to Ready — and for consumers to benefit from the depth and breadth of an evolving retail environment.
“We want to wake up in a world where there’s a thriving retail environment, where there are many retail players supporting a dynamic commerce ecosystem,” he said.
In fact, PayPal acts as “a catalyst and a democratizer” of that retail environment, enabling access to the elements that are now essential to maintaining a competitive place in a dynamic retail ecosystem.
PayPal for Marketplaces
According to Ready, Marketplaces are already leveling the retail playing field by connecting buyers who have specific needs with a group of sellers that can meet them. Today, more than half of consumers who shop online make purchases on marketplaces, and global marketplaces are expected to drive nearly 40 percent of the global online retail market by 2020.
Those marketplaces are complicated to run because they require serving all sides of the market simultaneously, including consumers who want to use particular payment methods, sellers who need to accept those payment methods and marketplaces that must move money from the buyer to the seller.
That, Ready said, means handling payment acceptance, securing money transmitter licenses, creating and managing escrow accounts, being compliant with country and/or state rules and regulations, managing FX risks associated with the buyer and/or seller transaction and then managing payout to the sellers in whatever currencies they use domestically.
PayPal powers many of the world’s largest marketplaces — eBay, Airbnb and Uber, among others — and has learned what’s required to be successful on a global scale, Ready explained. This is particularly true when it comes to securely managing the payments and money side of a two-sided platform.
That’s why PayPal launched PayPal for Marketplaces, an end-to-end global marketplace solution to help every marketplace — however large or small — leverage the capabilities the world’s best-in-class marketplaces use to run their own.
Ready said PayPal for Marketplaces brings all of the best practices being used by the biggest players in the space together in “a neat package.” It is particularly well-suited for marketplaces that are up and running already but want to eliminate the “hassle factor” of managing the payments complexities associated with operating a global online business.
According to Ready, Marketplaces works regardless of which payment methods customers are using — PayPal, credit or debit cards. The solution can be tailored to the specific needs of the marketplace and includes benefits such as buyer and seller protection, risk- and fraud-detection capabilities and checkout solutions like One Touch to drive conversion for merchants.
“The marketplace doesn’t want to solve for everything that goes into moving money, particularly as [they] become more global and the regulation gets more complex,” Ready noted. “We just take care of those things and make sure that accepting and distributing payments is seamless so they can focus on the selling — [which is what] they are really there to do.”
And, with the simultaneous launch of PayPal Marketing Solutions, he noted PayPal is also looking to make it easier for sellers to ensure they are fully guiding those conversions.
PayPal Marketing Solutions
PayPal’s Marketing Solutions is a series of tools to help businesses better understand customers and create engaging shopping experiences that can help them increase sales. A big part of the Marketing Solutions rollout is notifying the consumer — as soon as he or she lands on the home page — that PayPal is accepted at that retailer.
The notification helps the merchant get a clear picture of the customer’s behavior on the site. “Checking in” with PayPal means a merchant can build a picture of what those consumers do as they move around the site, how many shoppers are mobile shoppers, how many shop for big-ticket versus small-ticket items, how a particular merchant site attracts customers compared to other similar sites and, soon, actionable recommendations on how to help turn prospects into customers and customers into loyal and engaged patrons.
“The goal is to give them as much information as possible about who is buying and why so they can really build those experiences that customer want,” Ready explained.
He added that the question he and the PayPal team must answer is how to help retailers compete, emphasizing PayPal has worked over the past two decades to make it easier for consumers and merchants to connect at checkout. Today, that means giving merchants a set of robust tools and solutions to make those connections easier across the board, while also bringing 218 million active users to the retailers’ doorsteps.
“The retail world is changing a lot, but we’re committed to helping retailers come through the change in a very healthy way,” Ready said.