Online marketplaces need to meet higher standards if they want to keep customers from the competition.
For third-party marketplaces, that means supporting transactions in local currencies and through the local payment methods that both buyers and sellers prefer. As online shopping is now a global endeavor, that can be trickier than it seems.
These marketplaces are also tasked with making sure that they’re protecting both sides of the platform from fraudsters, who are coming prepared with a number of schemes. Marketplaces are facing an influx of counterfeit products and listings, for instance, and buyers and sellers are paying the price.
In the latest Payments And The Platform Economy Playbook, PYMNTS looks at how marketplaces are responding to the counterfeit threat as well as how they are continuing to innovate the customer experience.
What’s New in the Platform Economy
eCommerce giant Amazon is even experiencing counterfeit product challenges. Fraudsters are using false reviews and stolen IP addresses to lure in buyers, and grabbing links for out of stock or otherwise unavailable products to add undue credibility to their listings. To weed out false sellers, the marketplace uses automated programs and human customer service agents.
Amazon isn’t the only major eCommerce marketplace attempting to fend off fraud and counterfeit products. eBay is currently dealing with scammers who are targeting the platform through PayPal payment schemes. These fraudsters purchase URLs similar to legitimate sellers, tying a stolen email to those addresses before setting up PayPal accounts.
Companies and retail brands are also trying to make a dent in this new wall of counterfeits, with watchmaker Titan emerging victorious in a suit against fraudulent sellers on eCommerce site, Snapdeal. The suit alleged that these sellers were profiting off counterfeit watches, and the suit’s verdict now requires Snapdeal to provide an affidavit with all of the goods that were sold on its platform under the Titan brand.
For more on these and other stories, visit the Playbook’s News and Trends section.
Online Marketplaces and the $1.8 Counterfeit Problem
The rise of online shopping has proved as beneficial to legitimate consumers as it has to counterfeiters, with the sale of counterfeit goods now expected to reach $1.8 trillion by 2020. Marketplaces will need to confront the way they search for false sellers and counterfeit products if they don’t wish to leave buyers and sellers frustrated and out of funds, said Kimberly Gianopoulos, director at the U.S. Government Accountability Office (GAO). To learn more about how marketplaces work with payment providers and government agencies to prevent counterfeiting, visit the Playbook’s Feature Story.
How Luxury Marketplace Vestiaire Collective is Responding to Online Counterfeit Sellers
Luxury fashion and accessories have always been popular targets for fraudsters, and second-hand online marketplaces aren’t proving to be an exception. Online marketplaces that provide ways for both buyers and sellers to access luxury goods thus need to make sure they’re authenticating these items at every step of the process, said Maximilian Bittner, CEO of luxury marketplace Vestiaire Collective. To learn more about how Vestiaire Collective is vetting luxury products before they sell and working to protect its platform, visit the Playbook’s Case Study.
About the Playbook
The monthly Payments And The Platform Economy Playbook, a PYMNTS and Yapstone collaboration, aims to help platform payments decision-makers identify and manage the risks and rewards inherent in optimizing their operations and navigating real-time challenges.