Payment Methods

For Marketplace Platform Payments Experiences, Is It Back To Basics?

For Marketplace Platform Payments Experiences, Is It Back To Basics?

It’s easy to get caught up in the hype of new sharing economy platforms. “The Uber of furniture,” P2P closet-sharing and crowdshipping all certainly sound innovative. There’s a lot of competition to capture the $6 trillion in online payments for U.S. digital and physical goods that’s expected by 2024.

Marketplaces and their partners want to satisfy consumers who are comfortable with the convenience of online shopping. But not all emerging platform economy trends are attention-grabbing. Many are more operational in nature, and intended to give consumers more choice. What new initiatives might lack in excitement, they make up for in shifting the payments conversation. It might be time to get back to the basics.

In the latest Payments and the Platform Economy Playbook, PYMNTS analyzes how marketplaces are innovating their payment experiences and how they are adding new features to draw buyers and sellers away from competing platforms.

Cash Is Still King for Many

Unbanked or underbanked consumers aren’t just an issue in the developing world. The desire to pay with cash out of necessity is also a consideration closer to home.

According to an FDIC study, 6.5 percent of U.S. households in the United States were unbanked in 2017 (the most recent survey year), which equals approximately 8.4 million households. Additionally, 18.7 percent of U.S. households (24.2 million) were underbanked, meaning the household had a checking or savings account but turned outside of the banking system for other financial services.

Findings from the Federal Reserve reinforce the need for payment choice. According to a study, 77 percent of U.S. payments were made in person in 2017, and 39 percent of those were made with cash.

That’s why online marketplaces like Amazon are adding new ways for users to pay on their P2P marketplaces, including the ability to pay in cash. Specifically, Amazon PayCode is rolling out in the United States to make it easier for shoppers who don’t want to pay with credit cards. The option lets customers choose Amazon PayCode at checkout to receive a QR code and number that is referenced when paying in cash at more than 15,000 Western Union agent locations within 24 hours.

Global Preferences Matter

Marketplaces and their payment providers throughout the world also must remember that buyer and seller preference varies greatly, which makes it critical to support additional payment methods and currencies. Flexibility in the transaction process can enable marketplaces to differentiate themselves in this competitive and increasingly global space.

Choice in Germany: Digital marketplace eBay is introducing new payment experiences. In Germany, the company is starting to offer managed payments, which will present a “more relevant” selection of payment options at checkout. They will also offer a seamless checkout experience regardless of payment method, and eligible purchases will include buyer protection independent of payment method.

Prepaid cards for Singapore: Gaming company Razer recently partnered with card network Visa to facilitate payments to the region’s unbanked consumers. The former will integrate Visa support into its eWallet, allowing its 60 million customers to make and receive payments online and via prepaid cards.

Google goes against Paytm in India: Google is pushing growth in digital Indian marketplace usage by adding businesses to its Google Pay platform, which supports online and mobile payments for small and medium-sized businesses (SMBs). The company hopes to entice local consumers to use the service to shop and pay online, but just a small portion of the 60 million SMBs active in the country currently accept online payments. Native payments gateway provider Paytm remains dominant in the country, though, and has extended its hold by capturing 50 percent of the market share and processing an average of 400 million monthly transactions. It plans to maintain its competitive lead by boosting merchants’ adoption of its payment solution.

Mobile solutions are a must in China: Mobile payment demand has also risen among Chinese consumers over the past decade, which is spurring many merchants outside the nation to add support for mobile payments. A new mobile payment service by UnionPay aims to cater to China’s tourists. The QR code-based mobile solution is now accepted by three million sellers across 46 countries outside mainland China.

Last month, global payments firm Ingenico Group launched a suite of payment methods to help eCommerce firms operating in China. Ingenico is among the first global PSPs that fully integrate with all aspects of WeChat Pay, allowing its 1.1 billion users to do everything without leaving the WeChat ecosystem.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.