All around the world, the use of online marketplaces has increased rapidly due to the wide offer, safety and convenience, low prices and often free shipping.
In Italy, 51% of merchants sell on marketplaces and 98% of all e-commerce users have ordered at least every now and then at an online marketplace within the last month.[1]
Indeed, in Italy and in Germany, marketplaces have the highest weight in the e-commerce market. Data based on online retail sales estimated for January 2024 indicated that 44% of transactions were carried out on marketplaces in each country.[2]
In France, according to the Fevad, more and more merchants are selling their products on marketplaces, with the number growing by 31% in 2022.
In fact, 92% of French buyers plan to continue or increase their use of marketplaces, and 64% say they are motivated by the prospect of being able to buy everything on a single platform.
Besides, 35% of leading e-commerce sites sell on marketplaces. For 63% of them, this sales medium brings in more than 10% of their revenue.
Indeed, in France, estimated spending on marketplaces amounts to ten billion euros for the last quarter of 2023.[3]
Therefore, to take your growth strategy to the next level, the marketplace model is definitely not to be overlooked. Let’s see in detail what it’s all about.
What is a marketplace?
Connecting buyers and sellers in exchange for a sales commission, marketplaces offer a retail space for thousands of small sellers, leveraging platform features and traffic.
With a complex ecosystem, marketplaces involve many stakeholders: sellers, buyers, banks, payment service providers, and software publishers.
The marketplace model thus offers a flexible buying experience, a wide range of products and services, smooth payments, innovative features, and a diverse seller ecosystem.
For sellers, it provides reduced costs, simplified stock management, increased sales, and improved profitability.
To build a successful marketplace, four key pillars are essential:
- Clear value proposition to offer specific products or services that meet targeted needs, often focusing on niche markets;
- Powerful search engine and optimized catalog management to make products easily searchable and provide accurate product suggestions;
- Clear information with stock details, reviews, tracking, etc.
- Seamless interface and technical optimization to ensure a user-friendly platform and build loyalty through excellent customer experience.
First things first: complying with the regulatory authorities
Marketplaces must indeed conform with many regulations, notably regarding PSD2 and KYC (Know Your Customer). They must also fight against money laundering and terrorist financing, and respect GDPR.
To be compliant with the authorities, there are 3 options:
- to have your own license and operate as a payment institution;
- to apply to the central bank of your country for an exemption;
- to become an agent from an already certified payment institution.
As a matter of fact, becoming an agent is the easiest and fastest way to integrate payment services.
Ensuring an efficient KYC process
The KYC (Know Your Customer) process is fundamental for smooth operation: a fast, regulatory-compliant onboarding process is essential for a good user experience, which requires appropriate verification solutions.
Indeed, identity verification ensures that sellers are reliable, reinforcing trust and reducing the risk of fraud.
Besides, detecting fraudsters at the onboarding stage while protecting users against fraud throughout their purchasing journey is crucial to preserve the marketplace’s reputation and security, thus helping marketplaces to strengthen their position and their brand.
Relying on trusted partners
Key players are essential to marketplace success.
They include a SaaS solution, which provides the platform’s infrastructure, and the PSP, whose offering and expertise aim to optimize payment performance.
Payment is indeed central to any marketplace, so selecting the right partner is crucial.
As a global PSP, HiPay offers modular solutions that easily integrate with leading marketplace platforms for an augmented payment experience.
Choosing HiPay for unparalleled expertise and support
Designed with marketplaces in mind, our innovative solution simplifies payments, allowing sellers to focus on their business.
- To facilitate legal procedures
As we’ve seen, the easiest way to launch your marketplace is to obtain the agent status from an approved payment institution.
As a payment institution authorized in France by the Autorité de Contrôle Prudentiel et de Résolution (ACPR), HiPay guides you through the legal and administrative procedures and makes it easier to comply with regulatory authorities, thus providing you with an end-to-end marketplace solution while ensuring maximum security and regulatory compliance.
- To speed up the KYC process
Let HiPay verify your sellers’ documents as part of our simplified Know Your Customer process.
HiPay provides unique know-how when it comes to marketplaces, with a KYC process that facilitates onboarding for new sellers, and a team of experts on hand at all times to answer your questions.
You just need to send us your merchants’ KYC documents via API and the marketplace module automatically retrieves the documents so that you get a first-level response within 5 minutes!
A full identification is carried out within less than 3 days to enable merchants to be quickly operational on your marketplace.
- To easily manage payment flows
HiPay makes it easier to secure and allocate funds to third-party vendors through an escrow account, enabling the operator to allocate the funds to each of the sellers and take a commission.
From cash-in to cash-out, with HiPay you thus benefit from a comprehensive solution for your payments and settlements through a single provider!
- To rely on a unified management interface
Our powerful, all-in-one management interface gives you access to real-time monitoring as well as automated financial reconciliation and detailed account balances for each sales channel or store for simplified performance analysis.
You can thus keep a close eye on your data through rankings, periodic comparisons, or customized exports and favorites, and eliminate up to 80% of your accounting teams’ work!
- To fight fraud effectively
This single tool enables you to streamline and secure all your transactions. It also analyzes transactions in real time and assigns a risk level, thus protecting you against financial loss from chargebacks due to fraud.
What’s more, it can help to relax PSD2 rules (3DS v2) with exemptions for frictionless payments through simplified authentication.
- To take advantage of our partnerships and connectors
Our strategic partners among the leading SaaS platforms include Mirakl (innovative solution for B2B and B2C companies to easily build marketplaces), Izberg (SaaS solution dedicated to service marketplaces), Origami Marketplace (solution editor for B2B, B2C, or second-hand marketplaces), and Wizaplace (all-in-one solution to create a B2B product or service marketplace).
What’s more, our connectors, for instance for Mirakl and for Izberg, are available on our developer portal.
And to make things even easier, the implementation of HiPay Marketplace involves establishing connections between your marketplace platform and HiPay based on a simple integration through a set of APIs.
To easily get up-and-running with HiPay, you can also find some dedicated articles In the Starter guides section of our Support Center.
Success story: HiPay supports the creator of event-based sales
Veepee chose HiPay in 2017 to benefit from our expertise in managing and optimizing its Brandsplace (marketplace) with new payment methods, new scenarios, conversion optimization, etc.
Find out how we have provided them with guidance and support to offer both sellers and customers an augmented payment experience.
HiPay has around forty agents, including Veepee, Zenpark, LDLC, Label Emmaüs and SPORT 2000.
What about you: ready to revolutionize your marketplace experience with HiPay?
Contact our experts to find a solution that meets your needs!
[1] Sources: https://www.ecommerceitalia.info/en/report-en/report-e-commerce-in-italy-2024/ and https://www.teamitalia.nl/e-commerce-in-italy/
[2] Source: https://www.statista.com/statistics/1461026/marketplaces-share-of-total-e-commerce-europe/
[3] Source: https://www.fevad.com/les-chiffres-lessor-des-marketplaces-c2c/
