There is a Forbes Article from 2013 that reads, “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.”
As we sit here in 2016, it strikes me that there are now well beyond the 20 new marketplace companies of 2013, with countless variations and spins on the successful model of 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,” if you will, is more crowded. As the market continues to grow, it’s on each marketplace to offer more efficient and effective experiences in order to differentiate itself and win customers loyalty and trust.
A common topic of discussion for improving a platform is in user experience. I want to take it a step further and talk about the user experience in regards to the payout process, and how marketplaces can improve efficiency therein.
Get your “merchants” selling faster
There are a variety of marketplaces out there, but all have one commonality—onboarding new users must be a smooth process. If onboarding isn’t easy, no merchant will want to jump through the hoops of getting started. They’ll look to sell the good or service elsewhere.
When onboarding, collecting information for where to deliver payouts is probably one of the trickiest parts. You want it to feel smooth and trustworthy as merchants are entering their banking information.
Dwolla’s ACH APIs allow for you to build this process into your existing onboarding flow. 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 it’s earned will be routed to its connected bank account via ACH transfer.
Give your merchants speedy payouts
As you look to differentiate your consumer marketplace from the next guy’s, speedy payouts is the right way to go. Consider Uber v. Lyft. Right now, as rideshare 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 connecting sellers of high-end sneakers with buyers. When GOAT initially set out paying its merchants, it was requiring sellers to sign up for and transfer funds between up to two third-party e-wallet services. This process meant funds could take up to 7 days to reach a seller’s bank account.
With Dwolla, GOAT created a simple, branded integration giving sellers a way to connect a bank account to their marketplace profiles via the native GOAT mobile application. To accelerate seller liquidity, GOAT uses Next-Day bank transfers (via the Dwolla solution) for faster payouts.
GOAT eliminated the process of redirecting sellers to multiple third-party sites in order to register for different digital wallets and receive their sneaker payments to their bank accounts. As a result, sellers’ time to liquidity has reduced from up to 7 days to an average of 2.
Create scalable payouts processes
When improving efficiencies within marketplace payouts, you can’t pose a viable solution without considering the internal costs and time commitments of your payouts process.
Sure, the consumer experience is paramount, but if your team is dedicating hours upon hours to work through issues with your payouts process, you’re losing out on valuable time your team could be spent improving the core product or service. Instead, your team is left behind cleaning up and dealing with inefficient payout processes.
As your consumer marketplace grows, consider payouts processes that can scale right alongside that growth. For added reliability and automation, use an ACH API with event triggered webhooks like Dwolla.
For Popular Pays, as its Instagram advertising platform 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.
Reaching maximum payments efficiency
As the Forbes article says, the level of innovation in consumer marketplaces is unprecedented. There is a marketplace servicing every niche and interest. In order to differentiate from the market, you want to offer buyers a good user experience. But more importantly is the effort you put into building a seamless process for your merchants. If you don’t have good merchants and sellers, then you won’t have anything of quality for those buyers.
Make it easy to create an account and get those sellers paid out as quickly as possible. Internally, build a system that can easily scale as you grow to enable your team to maximize their efficiency.
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.