The Marketplace Economy
September 17, 2020 - With internet and smartphone penetration increasing throughout the globe and the massive success of companies such as Uber and Airbnb, the online marketplace industry has become a viable and popular method for e-commerce in today’s world.
An online marketplace is a website or mobile app that facilitates shopping from a variety of sources. A marketplace business does not usually own any inventory; the objective of a marketplace business is to present other people’s inventory to consumers and help facilitate the transaction.
A perfect example of an online marketplace is eBay, as they sell all kinds of products to a global audience, however there are many other types of marketplace businesses. Generally speaking, there are three primary types of marketplace businesses:
· Vertical Marketplace is when a business sells products from a variety of sources, but they are all of one type. The website “Etsy” is a prime example of a vertical marketplace, as they showcase arts & crafts from many suppliers and help facilitate the transactions with consumers.
· Horizontal Marketplace has a broader approach, and is when a website or app acts as a one-stop-shop, providing consumers with an array of different types of products all in one place. A perfect example of this is ‘Amazon’, as many businesses are able to showcase a variety of product types in a single platform.
· Global Marketplace is when a website or app sells all kinds of products, to locations throughout the world. As mentioned earlier, “eBay” is an ideal example of a global marketplace, allowing anyone to sell any kind of product on a global scale.
The marketplace economy has experienced huge growth over recent years, as it offers a major convenience to shoppers looking for a quick and easy experience. The marketplace business model is so appealing because it provides shoppers with access to the inventory of many suppliers and the marketplace business does not need to acquire inventory before offering it to consumers. By operating in this manner, marketplace businesses are able to offer a much wider range of products than could be presented by any typical store. Consumers understand that marketplace companies can offer products from a variety of sources, and that is why the e-commerce experience in a marketplace environment is more appealing than shopping on a website or app from a single retailer. This new method of e-commerce is no longer limited to giants like eBay, Uber and Alibaba; many start-ups have joined in on the trend and developed platforms to support a wide range of industries. RenoRun, for example, is a B2B marketplace platform, delivering construction material to contractors. Netflix is another example, as this B2C platform has changed the way people consume movies and television. With so many examples of the marketplace business method fundamentally changing the way certain industries operate, it has become clear that this is an effective business model and it is here to stay.
Nearly all marketplace businesses share one thing in common: the need to execute mass payments on a global scale. As the industry continues to grow, marketplace businesses require an efficient process for issuing mass payments to vendors and freelance employees throughout the world. This often requires establishing relationships with multiple payment providers, banks, and local payment services. All of this requires multiple complex integrations or manual processing, as well as access to several different currencies. This can be a challenging task, but it is a vital aspect of any marketplace business.
With Intercash’s innovative technology and 20+ years of global payment experience, we have the GLOBAL solution for any marketplace business, enabling the streamlining of global payments in multiple currencies via one simple integration and platform.
How can Intercash help?
With corporate offices in North America, Latin America, Asia-Pacific and Europe, Intercash maintains a presence in the world’s strongest marketplace economies and understands the needs of the industry. With a global payment solution encompassing bank transfers and prepaid card issuance from Intercash, marketplace businesses benefit from a turnkey solution for managing all of their global payment needs. This end-to-end service is fully customizable and can provide a better experience for freelancers and vendors, while creating a more efficient process for the business.
What is a prepaid card?
A prepaid card is an alternative banking card that provides marketplace businesses with an efficient method of payment. These cards work on the open loop network of Mastercard and Visa, and are a cost-effective solution for the marketplace industry to distribute global payments. This solution is also convenient for the vendors and freelance employees receiving instant payments, as the card is reloadable and can be used at over 30 million locations worldwide. The product serves as a viable substitute to traditional banks payment offerings and is more easily accessible for non-banked vendors and freelancers.
Additionally, we have seen the potential for instability in consumer spending due to the pandemic and other uncontrollable factors. As such, prepaid cards minimize the risk of overspending as there is a limit that can be imposed on each account. With the ability to define payment and spending limits on each unique card, a prepaid card program is a great tool for managing marketplace partners. And for those freelancers that wish to have their funds accessible within their corporate or personal bank account, we offer a simplistic method for transferring the funds to local bank accounts around the world.
With a solid market share in the digital payment industry, prepaid cards can also help to drive sales and spending among marketplace consumers; Intercash can develop customized incentive or loyalty programs and have them integrated directly into your marketplace platform. This helps to drive sales by offering promotions on the amount consumers spend, while also boosting the chance of repeat business as the client will want to spend the full value loaded on the card. Additionally, all of the cards can be branded for your business, increasing brand awareness and creating a more cohesive experience.
How to get started?
If you operate a marketplace business, you can complete our contact form to get in touch with one of our account representatives. With over 20 years of experience in the payment industry, innovative products and a turnkey solution, Intercash can take your marketplace to the next level.