Expert post: Jordi Nebot (CEO)
Although many of us have used this kind of platforms at some point, not everyone knows exactly what a marketplace or a collaborative economy platform is. Online markets and marketplaces are online platforms created by a company that acts as a neutral third party to put buyers and sellers in contact: what we could summarize as a “store of stores”.
In the case of the collaborative economy, these are digital platforms that function as a meeting place for users who interact to sell and/ or buy products or services between them. Both types of businesses have in common that they usually function as intermediaries in the flow of payments between buyers and sellers.
Marketplaces and collaborative economy platforms increase on the Internet in number and importance day after day. This implies new challenges associated with growth and legal regulations, that has inevitably put the focus on the payment processes of this kind of virtual business because of its particular situation.
However, many of these challenges don’t need to be addressed individually, with the ineffectiveness and cost overruns that this entails. As a payment technology specialized in marketplaces and sharing economy, such as Paylands, it’s a unique solution for many challenges. Let’s see the biggest ones:
– The exemption of the commercial agent is no longer useful. After the recent entry into force of the new European payment regulations PSD2, it has been stipulated that this type of business that functions as intermediaries between two parties will no longer be eligible for this exemption.
Thus, any marketplace or sharing economy business that doesn’t act exclusively on behalf of the seller or the payer and that also owns or controls funds, will need a payment entity license. Paylands allows compliance with banking regulations, being a simple and effective solution for this problem.
– The management of fund movements needs to be automated. When one of these companies starts to grow, the automation of different types of fund movements is essential for productivity. These are businesses with numerous users in both parts of the sales channel and many concepts to consider, such as commissions, transportation costs, user identification… Concepts that the payment provider must automate in an efficient and convenient way for the customer .
– An API is required to facilitate the KYC (Know Your Customer). Security and user identification is especially important in the case of sharing economy platforms. In this type of business, where the seller can also be the buyer, those users who offer services and are going to be financially rewarded must be identified and validated, what is commonly known as performing the KYC, before receiving the funds and, therefore, the payment technology must be able to operate under these circumstances through a specific API.
– Internationalization must be a simple process. A marketplace or a sharing economy platform can (and usually will) be born at a national level, but it’s possible that in the medium term it will take the international leap. For this reason it’s important to have a scalable payment technology from the outset, with the ability to operate and manage the funds in different countries.