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Marketplaces solving payments puzzle

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We have witnessed the rise and fall of many marketplaces around the world, some got truly global, some became local leaders, others found their niches. When we say ‘marketplace’ we instantly think of Amazon, or Taobao, or Wish, or AliExpress, or Jumia, depending on your region and habits, of course. Strictly speaking, the marketplace is not a single retailer, it is a place for many sellers. Marketplaces of modern time are so strong around the world. There is no arguing that the model that was once doubted now takes almost half of global online sales, it has actually won the world

However, the marketplace model itself is so effective, it is no longer retail-specific. Uber, Airbnb, Taskrabbit, Upwork, Etsy - they all employ the same model connecting those who sell or provide a service to those who need it. I personally think this is a huge driver for the entrepreneurs, freelancers, the self-employed, and the whole gig economy we see unfolding in front of our eyes.

If anything, COVID has not severed this digital economy, it actually created a boost and let so many people around the world find another way to sustain themselves.

The challenge both local and in particular cross-border marketplace models face lies heavily in the financial logistics. How to collect payments and make payouts locally, without having to route payment to go cross-border back and forth? How to not burden your company with your sellers and clients financial volume, and let them settle directly? How to settle with multiple sellers in different countries instantly and not in a month? How to pay out to the individuals and the self-employed as sellers, and be sure of the tax compliance side?

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New challenges require for the emerging payment technology and some regulatory shifts. On the regulatory side, there has to be a legal way for the individuals to provide a service or sell a product through the platform to another individual. Many countries allowed this before, others have introduced the self-employed tax status only in the past few years, like Russia did. 

On the technology side, however, things are developing fast. Smart solutions to split the payment and route it to multiple recipients start to appear. It is possible now for the marketplace to orchestrate how the single payment is split and where it is routed - to a seller or a couple of them, to the freelancer and the self-employed individual. Maybe some of the amount to the marketing affiliate, perhaps some more to the delivery or logistics company. Route local, route cross-border. Settle the platform commission to the marketplace itself. This hasn’t been possible before, guys. It might sound boring to those outside the payment industry, but it is quite exciting for those that are in!

Now a traveller can settle with the property owner directly, a student with their online teacher, a company with the freelancers they hire. All the while the apps that introduced them get only their commission. What has not been possible before even 5 years ago, seems to unfold between our eyes. Payment solutions for the marketplace model merchants are rolled out in some regions by Adyen, WorldPay, in India by RazorPay, in Russia by Bank 131. As usual, payment companies are jumping to the front row to solve the emerging global financial logistics challenges. And I hope they will!


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Anna Kuzmina

Anna Kuzmina



Member since

21 Jan 2019



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