Players in the sharing economy must contend with an increasingly complex online payments ecosystem as they move into new regions and attract participants to their platforms.
They must also take a more balanced approach to growth, sidestepping the payments innovation mistakes that established players have already made, according to Colin Gardiner, chief revenue officer for shared RV marketplace Outdoorsy.
“We have had the luxury of seeing other people make mistakes, which is critical to not making them,” Gardiner said. “I view [Outdoorsy] as the sharing economy 2.0. Realistically, we went with a technology- and quality- and trust-first solution … and really [Outdoorsy] is more of a fully managed marketplace rather than a listing site where you can get connected with people.”
Outdoorsy is a P2P marketplace for RV rentals that works similarly to Airbnb but with a “movable product base,” according to Gardiner. The company aims to sidestep some of the land mines that members of the original sharing economy have unwittingly planted by modifying its approach to buyer and seller payments and its international expansion strategies, which both emphasize trust before growth.
Fraud, Payment Regulations Are Affecting Seamless Payments
Outdoorsy users looking to rent their RVs list them on the online platform for local renters to book. Renters pay upon booking trips, and owners receive their payments once trips have begun. Outdoorsy works to ensure its customers are comfortable with this process, knowing it must make its users not only more familiar with using the platform but more trusting.
This requires payment innovation that matches both owners’ and renters’ market-specific needs. Platforms need to keep an eye on evolving security and payment regulations in each new region to foster these developments, which is a bit different from other sharing economy entities’ approaches, Gardiner explained.
“It is great that we started after [companies] like Uber and Airbnb [because watching] all of these other big movers [means] we got to see what not to stumble on,” he said. “There are a few core pillars from our business in that [respect]: One is that we respect regulatory constraints, and we try to work with them instead of against them. … For us, that is a really big part of our business — working with regulators and entities like insurance [providers] to make mutually beneficial progress, rather than [building] an adversarial relationship.”
Outdoorsy is available in the U.S. and several European countries, including France, Germany, Italy, Spain and the United Kingdom. International consumers’ payment preferences are relatively similar, but local regulations are not. The company supports automated clearing house (ACH) payments as well as major credit and debit cards for renters, and it provides direct ACH payouts for owners with only minor tweaks depending on the market. Outdoorsy contends with different regulations for European customers, such as the revised Payment Services Directive (PSD2) and strong customer authentication (SCA), which can burden marketplaces’ abilities to entice customers and limit their payments approaches.
Changing regulations’ impact on sharing economy payments cannot be taken lightly, especially as rising fraud levels concern customers about their online data. Fraudsters have found ways to circumvent onboarding verification and other tools designed to keep them off online platforms, frustrating buyers, sellers and marketplaces alike.
“I think the general perception of the sharing economy right now is that things aren’t verified against fraud,” Gardiner said. “Think of [Airbnb’s] most recent [false listing] troubles [and other related scams]. Identity verification and having really reliable inventory on the platform that is real and verified is just now table stakes, and that is what we have [focused] on since the beginning.”
Marketplaces must design their platforms and payment innovations to retain user trust, Gardiner noted. Outdoorsy is relying on artificial intelligence (AI) and machine learning (ML) to keep track of fraud on its platform. Its AI-driven software will analyze factors like shopping behaviors and account creation to isolate fraud.
Payments Are Critical to Consumer Trust
Keeping payments seamless is one way for marketplaces to retain consumer trust, as the process is foundational to customers’ experiences. Buyers and sellers expect both speed and security with payments, and not offering both factors is one of the top reasons that customers report leaving a marketplace. Gardiner reiterated that trust is critical and comes from matching both sides’ expectations.
“From the beginning, we have always invested in trust,” he said. “For us it was really about … having a platform that was really trusted and really had a one-on-one relationship with people, [saying], ‘This is [the right] person, and we have verified that [he is] real, and [he is] not going to ruin your vehicle.’”
The sharing economy 2.0 must sidestep problems the original sharing economy did not predict, including that of tying regulatory compliance and fraud protection to payments innovation. Identity verification, fraud protection and regulator collaboration are all critical toward maintaining the seamless payments that buyers and sellers now consider routine.