In the platform economy, marketplaces and their partners want to satisfy shoppers who are comfortable with eCommerce and expect seamless payments experiences. The last thing buyers or sellers want to happen is payment friction, which could inspire them to take their transactions elsewhere. At the same time, the online payments space is booming.
The total transaction value of the fast-growing online payments industry for all products is set to surpass $6 trillion by 2024, according to our Payments and the Platform Economy Playbook. And consumers are anticipating consistent speed and service regardless of where their orders start. The report also notes that marketplaces and their payment providers around the globe need to take into account that buyer and seller preference greatly varies, which “makes supporting additional payment methods and currencies critical.”
From eBay to Amazon and OfferUp, platform economy innovators are bringing expanded options for payments and commerce to the table – and reducing payments friction along the way. These are just some of the ways marketplaces and other platforms are making it easier for buyers and sellers to transact through the web:
The expected value of online payments for U.S. digital and physical goods by 2024 is $6 trillion. And digital marketplaces are rolling out new payment experiences. eBay, for instance, is starting to offer managed payments in Germany. The company says buyers will have a “more relevant” selection of payment options at checkout. They will also have a seamless checkout experience regardless of payment method, and eligible purchases will include buyer protection independent of payment method. And sellers will benefit from having a central place to manage their business, resulting in lower costs, more control of their economics and fast, direct payouts. Eben Sermon, vice president of eBay Germany, said in an announcement that “managed payments will significantly simplify the customer experience for both buyers and sellers on eBay.”
The anticipated value of the global mobile payment technology market by 2024 is $3.4 trillion. And online platforms are tapping into mobile technology to power payments experiences. Amazon PayCode is rolling out in the United States, for instance, to make it easier for shoppers to use cash for payments. The option lets customers choose Amazon PayCode at checkout. Shoppers then 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. For returns, shoppers will get a cash refund at a participating Western Union location for Amazon PayCode orders.
The value of the global payment processing solutions market is projected to be $78 billion by 2026. And payment firms are enabling technology to help online shopping firms in other countries. Ingenico Group, for instance, is launching a suite of payment methods to help eCommerce firms operating in China. Ingenico noted that 82 percent of people in China use some type of mobile device. It has teamed up with Alipay, UnionPay and WeChat Pay to better serve those users. Gabriel de Montessus, SVP of global online (retail business unit) for Ingenico Group, said in an announcement, “Our long-time presence and activity in China means that we are perfectly positioned to partner with merchants wanting to access the truly local consumer market.”
Millennials reportedly lost $71 million to online shopping-related fraud over the past two years. A Federal Trade Commission (FTC) report has revealed millennials are 25 percent more likely to report losing money to fraud than consumers ages 40 and over. The FTC’s latest Consumer Protection Data Spotlight highlights that millennials (ages 20-39) are twice as likely to report losing money to online shopping fraud than their older counterparts. Online shopping fraud reports include complaints about products that are not as advertised or were never delivered. The top five frauds to which millennials report losing money are online shopping frauds, government imposters, business imposters, fake check scams and romance scams.
Mobile sales are projected to encompass 70 percent of the eCommerce market by 2022. Mission-driven organizations are working with mobile marketplaces to bring their merchandise in front of millions of shoppers through eCommerce. Several Goodwill regions, for instance, are teaming with OfferUp. Over 100 Goodwill store locations ranging from San Francisco to New York are uploading products such as clothing, collectibles and furniture to the platform to drive in-store and online sales. With the tie-up, the items are listed under handles for regional Goodwill locations. Consumers can then purchase products that can be delivered or picked up at a local store.
From OfferUp to eBay, digital innovators are making it easier for buyers to purchase (and sellers to transact) through the web. And, in a competitive and increasingly global space, flexibility in the transaction process can let marketplaces stand out in a global and competitive arena.