PayPaI Launches PayPal for Marketplaces
From its origins with eBay (it really wasn’t that long an independant startup) and subsequent spin-off, the company has served many other marketplaces such as Etsy, Uber, Airbnb, etc.
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The company supported these marketplaces with a variety of solutions, ranging from basic API integration to tightly interwoven system with eBay.
With years of growth in eCommerce, many fintech startups, as well as major tech companies such as Google and Amazon have entered the payment space.
Despite all the competition, PayPal has stayed ahead of the game in working with third-party marketplaces as the brand is well respected and a known entity among consumers.
However, it is never a good idea to be complacent, and PayPal is taking an active approach to ensure its dominant position among payment solutions for marketplaces.
So, Is This PayPal for Marketplaces only Marketing?
Yes and No. PayPal is dedicating a business unit to support the needs of marketplaces specifically. This seems to include customization options not typical for a standard merchant processor.
With a long list of proprietary features and options for marketplaces, the company can tailor the payment process for marketplaces supporting shoppers in more than 200 markets and sellers in over 120 markets.
“We exclusively use PayPal for Marketplaces in our peer-to-peer marketplace. By integrating with PayPal’s end-to-end solution, we are able to focus on building the best possible marketplace without having to worry about the headaches that come with payment processing and ACH payouts.
It has allowed us to be fully international from launch while providing comprehensive Buyer and Seller Protection for our users.
As a re-commerce marketplace, having PayPal on our side when it comes to Trust & Safety adds an invaluable sense of legitimacy to our brand. As an added bonus, the mobile optimization leads to increased conversion in our purchase funnel.
Without PayPal we would have to significantly increase the size of our team and our business would likely be many years behind where it stands today.”
Grailed Founder and CEO Arun Gupta
Why The Push For Marketplaces?
In 2016, Forrester Research estimated that more than half of all consumers shop on marketplaces.
In another study called “Rise of the Global Marketplaces,“ Ecommerce Foundation and Nyenrode Business University interviewed 243 retailers and 43 retail consultants from all over the world about marketplaces such as Amazon, eBay, and Alibaba.
That 2015 study found global marketplaces such as Amazon, eBay, Alibaba, and others will own almost 40% of the global retail market by 2020.
Consider emerging markets and the importance of eCommerce growth in marketplaces may even be larger than this 2015 study. Just this year, eCommerce in the Middle East has seen big changes.
Amazon aquired regional marketplace Souq, and just a few months later, a brand new marketplace called Noon.com emerged. eCommerce in the Middle East is growing, and it is all starting with marketplaces.
In Africa, regional marketplaces such as Mall for Africa, are trying to take advantage of an expanding affluent consumer base.
No matter where one looks today, marketplaces are popping up everywhere for everything from ride sharing to buying custom jewelry.
And marketplaces may play an even more significant role in the future as virtual reality, voice enabled commerce, and image search technologies require substantial computing power that is just beyond the reach of the average small business eCommerce store.
Even in relatively mature eCommerce regions such as North America and Europe, there is still great potential for more marketplaces to enter the region and establish in a niche that may only be served by independent eCommerce sites right now.
This is the future PayPal is trying to embrace. New marketplaces in industry segments, new regions, new cultures, all this growth equals more payment processing and more global trade.
How Do I Benefit as a Merchant?
If you are selling globally, you may find specialized marketplaces in regions or industry groups that offer a better experience for shoppers than the global brands such as eBay and Amazon.
The fact that PayPal is actively pursuing marketplaces means it will be easier for small business sellers to deal with receiving payments everywhere, as all payments end up in one PayPal account.
The more marketplaces enable PayPal on their platform, the easier it will be for merchants to start selling and grow sales. Who doesn’t want that? And that is the future PayPal is targeting with PayPal for Marketplaces.
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Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.