Payments Powering the Platform Economy

Payments And Platforms Play Well Together

online shopping

As virtual marketplaces displace (and replace) the physical variety at a dizzying pace, payments speed and security are paramount concerns. When transactions and payments occur cross-border, those concerns are doubled. Companies want and need more visibility into cross-border payments, and with the blastoff of eCommerce in 2020, those needs grow daily.

The July Payments Powering the Platform Economy Report, a Payoneer collaboration, explores the marketplace ecosystem, its benefits as well as its fraud dangers as COVID confusion lingers.

“Online transactions are lifelines for small to mid-sized businesses (SMBs) that may no longer be able to sell in person. Major eCommerce platforms are thus seeking to build merchant loyalty and expand their customer bases by focusing on this sector, per the July report.

That’s a sound strategy, but not without risk. The new report delves deeply into the fraud aspects of post-pandemic commerce, with an eye on the role of marketplaces.

“Marketplaces need to provide sellers with easy experiences while ensuring they do not accidentally onboard fraudsters, as bad actors can attempt to defraud customers by promising products they never deliver. eCommerce platform partners can help digital marketplaces catch malicious sellers as well as detect when fraudsters might be trying to pop up on marketplaces under new names.”

Marketplaces And Digital Pickpockets

As actual marketplaces are plagued by pickpockets, so online marketplaces have their own crooks. The scams may be variations on the old bait-and-switch, but they do damage.

“With the incredible growth that eCommerce has seen in recent months, marketplaces all over the world are facing increased risks in the form of fraud. To protect customer experience, eCommerce platforms need to ensure that they are mitigating seller risks,” said Adam Cohen, head of enterprise at Payoneer.

“These range from businesses that run completely fraudulent stores that never send out a product ... to what we call ‘soft fraud,’ characterized by delivery issues, poor quality of goods or other similar problems,” he said.

Combatting this is a torrent of ingenuity from platform providers that spent the first-half of 2020 rethinking ecommerce transaction flow, authentication — every safety protocol — especially in the realm of cross-border trade and payments where seller trust is critical.

“Winning over … valuable sellers takes work … as merchants are often selective about the platforms with which they onboard,” the report states. “Sellers need to be certain that marketplaces can solve their eCommerce frictions by providing convenient payout experiences that suit their needs and are compliant with local currency regulations.”

‘An Ecosystem-Wide View’

Noting that eCommerce sites saw transactions rise close to 25 percent in April alone, interest in digital marketplaces has held steady through a string of state-level reopenings.

That ongoing confusion and lack of continuity is good cover for cybercrooks whose specialty is preying on marketplace buyers, sellers and users. It takes a preemptive approach to fraud.

“The challenge is that it can be very difficult for a marketplace to be preemptive rather than responsive to these kinds of issues. If they wait until problems are reported, they may have already experienced staggering financial losses and irreparable brand damage.”

“Proactively weeding out bad players, however, requires an ecosystem-wide view, as many of these professional fraudsters invest significant resources to avoid detection,” Cohen said.

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