According to a Forbes article from 2013, “Over the last seven years, more than 20 new marketplace companies have emerged, representing more than $15 billion of market capitalization and ushering in a whole new era of consumer services. This level of innovation is unprecedented.”
If that was unprecedented, what has happened over the next seven years was remarkable.
As we sit here in 2020, there are now well beyond 20 new marketplace companies, with countless variations connecting buyers and sellers. It’s almost comical to think that at one time there were only 20 marketplaces. As the Forbes article correctly predicted, a new era of consumer services has emerged.
Now the “marketplace market,” is more crowded. As each market continues to grow, each marketplace must offer more efficient and effective experiences in order to differentiate itself and win customer loyalty.
A common topic of discussion for improving an online marketplace is in user experience. This blog will take that conversation a step further and discuss user experience in regards to the payment process and how marketplaces can improve their overall payment process with Dwolla’s ACH API.
Tips for Improving Your Marketplace User Experience
Any marketplace must design experiences with the user in mind. A poor user experience can handcuff even the best ideas.
Usability assesses how easy it is to navigate your user interface. The Nielsen Norman Group defines usability with 5 components:
Learnability: How easy is it for users to accomplish basic tasks?
- Efficiency: Once users have the design learned, how quickly can they perform a task?
- Memorability: When a user returns, how easily can they reestablish proficiency?
- Errors: How many errors do users make, how severe are these errors and can they recover from making the error?
- Satisfaction: Is the design pleasant to use?
Usability is a necessary consideration for marketplaces to survive in 2020. Websites and applications that are difficult to use make it easy for people to leave.
How to Avoid Having a Negative User Experience
Before pushing anything live to production, Dwolla’s user experience team conducts interviews and surveys to gain a better understanding of our users, their motivations and actions on Dwolla.com. After analyzing that data, prioritizing the results and creating high fidelity mockups, internal team members participate in multiple reviews and quality assurance (QA) testing.
It’s recommended to never release something without first testing multiple times. Avoid presenting unorganized information to the user and requiring multiple clicks to accomplish a goal; too many clicks can cause a user to exit and not return.
How to Get Your “Merchants” Selling Faster
Marketplaces all have one commonality—onboarding new users. If onboarding isn’t easy, no merchant will want to jump through the hoops of getting started. They’ll look to sell their goods or service elsewhere.
When onboarding, collecting information is probably one of the trickiest parts. A delightful onboarding experience creates trust between the marketplace and merchant.
Dwolla’s ACH API allows marketplaces to build this process into your existing onboarding flow, meaning your user isn’t sent to a third-party site to complete the onboarding. Simply request an account and routing number and integrate this step into your registration. Once the time comes for a merchant to “cash out,” the funds are routed to its connected bank account via ACH transfer.
Improving Marketplace Payouts
Speed of payment is a great way to differentiate your consumer marketplace.
Consider rideshare marketplaces. Right now, as these marketplaces continue to develop, drivers are considering their options. One point of comparison is how quickly the drivers will get paid after delivery of service. In turn, rideshare programs are competing to deliver payouts to drivers as quickly as possible.
At Dwolla, we get it—as a merchant or contractor, when you sell a good or perform a service, you want to get paid now.
An easy-to-integrate ACH API can enable a more seamless payouts process. For example, consider GOAT.
GOAT is an online marketplace that connects sellers of high-end sneakers with buyers. When GOAT initially paid its merchants, GOAT would require sellers to sign up and transfer funds between two third-party e-wallet services.
This process meant funds could take up to seven days to reach a seller’s bank account.
By switching to Dwolla, GOAT created a simple, branded integration to give sellers a way to connect an existing bank account to their marketplace profiles via the native GOAT mobile application.
To accelerate seller liquidity, GOAT uses Next-Day bank transfers (via Dwolla’s ACH API) for faster payouts.
GOAT eliminated the process of redirecting sellers to multiple third-party sites in order to register for different digital wallets. As a result, sellers’ time to liquidity was reduced from up to seven days to an average of two.
Creating Scalable Payouts Processes
When improving marketplace payouts, consider the internal costs and time commitments of your payouts process.
Consumer experience is paramount, but if your team is dedicating hours upon hours to work through issues with your payouts process, consumer experience suffers and you’re losing valuable time that could be spent improving the core product or service. Instead, your team is left behind cleaning up and dealing with inefficient payout processes.
For added reliability and automation, use an ACH API with event triggered webhooks like Dwolla. If you want to initiate thousands of payments at once, you can with Dwolla.
Let’s look at two examples of how Dwolla helped improve marketplace payments:
For Instagram advertising platform Popular Pays, as it grew in volume, it implemented Dwolla’s webhooks and ACH API. Using this automated process helped decrease time spent on manual accounts payable tasks by 50%, drastically reduced reconciliation errors, and cut transaction times from 10 business days to 1-2 business days.
In the early days, a few spreadsheets or a simple invoicing software was fine. As you move to processing hundreds to thousands of payouts, look to a payment provider that can automate ACH payments—like Popular Pays did.
Manufacturing a Marketplace
Veryable is a manufacturing marketplace that connects manufacturers and distributors with an on-demand pool of workers for short-term work opportunities.
With a selling point of daily payments, Veryable was having difficulty delivering on that promise. After six months, the marketplace began searching for a new online payment solution.
“I’m a believer in sticking to your core competencies and partnering with people who are smarter than I am,” says Noah Labhart, CTO & Co-Founder of Veryable. “We didn’t need to know how to process ACH payments, we just needed to find the right partner that does and does it well. That was Dwolla.”
Today, 24 hours after an opportunity is completed, Veryable sends payments directly to the bank accounts of each operator—using Dwolla’s ACH API and Same Day ACH.
Reaching Maximum Payments Efficiency
As the Forbes article said, the level of innovation in consumer marketplaces is unprecedented, with a marketplace to service every niche and interest. In order to differentiate from the market, offer buyers a good user experience. More importantly, the effort you put into building a seamless onboarding process for your merchants.
Streamline and simplify the process for those merchants to get their product or service out in the world.
We suggest payments as a great place to start.