The platform economy is being transformed by an increased demand for faster payments bolstered by mobile usage, according to the latest Payments and the Platform Economy Playbook. It’s also accommodating changing customer expectations for personalized and customized offerings.
The global digital payments market was valued at $3.4 billion in 2018 and is expected to reach $7.6 billion by 2024, a CAGR of 13.7 percent, during the forecast period of 2019-2024.
But it’s countries like China and India where the economy developed a mobile-first mindset that is driving real growth in digital payments. India’s payment gateway provider Paytm has captured 50 percent of the market share, with approximately $500 billion in transactions expected to be made electronically within the country by 2020, many via smartphone.
The platform economy encompasses work-for-hire transactions, food orders and vacation rentals. It has also extended to facilitating sales of goods and services catered toward users’ needs.
Online ticketing marketplace TickPick falls into the latter category. In an interview with PYMNTS, Brett Goldberg, the company’s co-founder and co-CEO, spoke about instant payments in the increasingly saturated online ticket sales market, where newcomers must compete with established players like Stubhub.
Price transparency is key and can provide an edge over competitors. “Everyone always has some sort of service charge or convenience charge hidden as deep as possible within the checkout flow. And we just said, ‘Well, let’s just follow the Amazon model. No [competitors do] it that way, and that’s the way people like to shop,” Goldberg said.
He acknowledged that payments are becoming more complicated as expectations for real-time transactions and greater personalization have grown.
The company is refining its mobile solution to use customers’ preferences to provide them with the deals they value most. “Once you shop [in-app], you can set that best deal to be a little more tailored toward you, so it’s less 50/50. If you tell us, ‘I’m a budget shopper,’ then it’s going to put 80 percent weighting on the price and 20 percent on seat location,” Goldberg said.
This trend toward greater personalization is taking different forms, from pricing, as in the above example, to offering experiences that are customized to users’ tastes. IfOnly, calling itself an “experience marketplace,” offers luxury events and local classes available by auction or purchase. Major platforms like Airbnb have also dipped into this market, offering experiences and adventures as alternatives to typical tours.
Fixers, an experiential platform, has also emerged to fill the void for travelers seeking adventurous excursions. Taking a cue from Etsy, which connects craftspeople to buyers, the site facilitates entrepreneurs and influencers to offer unique and customized experiences for the public. During customer sign-up, users are asked a number of questions to determine their travel style and how much they want to spend on their experiences.
Fixers Founder and Chief Creative Officer Lisa Simpson explained this new generation of travelers to PYMNTS: “They want to collect the experiences, not the destinations. That means travelers don’t say they want to go to Bali; they want to go to a yoga retreat in Bali.”
“There’s no question that the experience economy is here,” said John Boris, CEO of IfOnly. “It’s real, [and] there’s no question that people are placing greater emphasis on experiences than material things.”
Demonstrating that digital platforms must match their customers’ preferences, IfOnly does not yet provide a mobile app or allow mobile wallet payments. While the company has a large mobile customer base, users tend to be more comfortable with credit card payments, especially for the more expensive luxury experiences.
With that said, many platforms are taking the approach of offering multiple payment options to cover all bases. Google recently expanded its longstanding partnership with payment provider PayPal, allowing customers to access PayPal through additional Google Apps.
PayPal used to be more competitive with companies like Apple and Google, but has recently been partnering with companies like Visa, Samsung and Walmart to help with online transactions and POS locations in retail stores.
According to TickPick’s Goldberg, PayPal and Apple Pay each account for approximately 10 percent of the platform’s payments. There are future plans to support Venmo and more Android-based wallets.