Why Trust Is Crucial for an Online Marketplace Platform Building a Trusted Online Marketplace Platform Online marketplaces enable people from around the world to buy and sell goods and services wherever and whenever they choose. The emergence of online marketplaces in all their different forms is transforming the global economy. Virtually connecting parties bypasses physical limitations, such as staffing and hours of operation, enabling marketplaces to quickly expand globally. But creating a successful marketplace requires replicating the trust people have when transacting in person and mitigating fears of misrepresentation or fraud. Developing a strong reputation of trust and safety is critical to growing a marketplace of vendors and buyers. What Is an Online Marketplace? An online marketplace connects buyers and sellers digitally through a website or app. Some online marketplaces replicate traditional buying and selling. Others act as a third party to match almost any need with a provider. Sharing Economy This is a marketplace for sharing assets. Airbnb, for example, matches accommodations with people looking for somewhere to stay. The sharing economy leverages existing resources without the demands of new financing and production. Gig Economy This marketplace enables contract work. Uber, for instance, matches drivers with passengers. The gig economy offers contract workers opportunities to generate income when they want. Direct to Consumer These marketplaces, such as Shopify, let businesses sell directly to people. The business might create a virtual storefront or list its products in a directory. Consumers have access to products when they want them through a cohesive interface. Peer to Peer These marketplaces, such as eBay, let people sell to people. While each online marketplace model is different, there are common factors: Enough vendors with the inventory to interest consumers Enough consumers to make it worthwhile for vendors An interface that simplifies navigating numerous listings The ability to quickly add, change or delete listings Listings with enough information to enable educated decisions Some of the biggest questions marketplaces make are: How anonymous will buyers and sellers be? How will reviews be handled? What other market-design choices will help or hinder trust in a listing? Marketplace success often depends on understanding what vendors and customers want and delivering an experience that helps them accomplish their goals. Industry Report Wary Customers Seek Reassurance From Online Marketplaces How marketplaces are refining their identity verification strategies to improve security, build trust and create reassuring experiences to better match changing customer expectations Marketplace Trust and Safety Programs Marketplace trust and safety programs protect customers and build organizations’ reputations as secure places to transact or interact. Social, operational and regulatory elements all factor in to establishing trust in a marketplace. Different global markets have different standards and expectations. Fraudsters constantly modify their schemes. High-traffic periods can overwhelm teams and technology stacks. The organizational structure determines who has responsibility for ensuring the marketplace’s integrity. Some positions that oversee trust and safety are: Risk officer — Validates and onboards buyer and sellers Compliance officer — Ensures compliance with various Know Your Customer (KYC), privacy and local regulations Trust and safety manager — Handles sensitive, complex user-facing issues Each employee’s actions and every company decision affects trust. Some of the more important considerations are: Code of conduct — What are the terms and conditions and how will the marketplace handle problems? Communication channels — How will buyers and sellers communicate? User experience — Do the design and interface promote trust? Verifying buyers and sellers — Are participants vetted? Verifying listing information — Are there procedures for checking listings? Payment options — Are payments handled by the marketplace, a third party or the participants? Customer support — Are questions answered quickly and completely? A trust-first philosophy can help marketplaces provide safe experiences that enhance their reputation and fuel growth. Industry Sheet Online Marketplaces Use identity verification to ensure a safe and secure community Verifying Marketplace Buyers and Sellers Marketplaces have varying approaches to anonymity and verification. Some put the responsibility on participants and have no identity verification or business verification requirements. That approach can present risks. “The lack of transparency and accountability in today’s digital marketplaces has contributed to the rapid rise of organized retail crime, which has become one of the top challenges facing the retail industry today,” said Alex Gourlay, former co-chief operating officer of the Walgreens Boots Alliance, and president, Walgreens. Regulations to enable trustworthy, safe and transparent online environments are gaining traction. In the European Union, the Digital Services Act, which requires marketplace traders be traceable, has become law. Under Article 22, Traceability of Traders, anyone selling or promoting goods or services on online platforms must provide: Name, address, telephone number and email address Identity documentation Bank account details (for a person) Registration number (for a business) Traders also must self-certify that they offer only products or services that comply with applicable laws. Many marketplaces now verify all participants to protect buyers, sellers and the company’s reputation. That approach helps reduce fraud, mitigate risk and increase trust in the platform. When marketplaces apply optimized vendor onboarding, the business relationship starts with trust and a positive experience, allowing vendors to quickly start transacting. A risk-based approach to onboarding, combined with technology that allows for adaptable, automated workflows, helps marketplaces minimize delays and maximize safety. Using identity verification for buyers indicates the marketplace wants only legitimate users on the platform. Identity verification also helps decrease security fears because it provides accountability. Case Study Building Trust and Safety Across Borders Grow a trusted global marketplace with verified users, buyers and merchants Growing a Global Marketplace Maximizing reach for a global audience often requires fast, secure onboarding. Each marketplace is unique. Understanding the different risks presented by vendors and customers and adjusting onboarding accordingly can minimize friction and maximize risk mitigation. A risk-based approach to onboarding provides that flexibility. It allows the marketplace to determine a market segment’s risk level and apply appropriate identity verification and due diligence. Factors that can pinpoint participant risk levels include: Transaction frequency Industry or market segments Expected transaction amounts Customer and merchant locations The initial risk level for opening an account might require verifying only a person’s name, address and birthdate. The risk level may rise and require further verification when transactions begin or hit a threshold. Seller onboarding may require additional steps to mitigate fraud, money laundering or other illegal activities. Typically, merchant onboarding involves: Prescreening KYC and identity verification History check Business and operational model analysis Web content analysis Information security compliance Credit risk underwriting The process also often depends on the marketplaces business model and risk-based approach. When platforms accept marketplace payments, revenue can increase but so can risk. Preparing for Marketplace Success The better a marketplace connects buyers and sellers, the more successful it can be. Combining data and technology can position marketplaces to improve those connections through insight into customer and vendor behavior. Marketplaces can create trusted platforms by applying agile, efficient verification strategies starting at onboarding. Identity and business verification can help uncover bad actors before they engage with the platform. Identity or business verification, though, can be complex, especially with a global audience transacting in a borderless economy. Verification includes: Determining the most effective data points and analyses Integrating different data, access requirements, system protocols, data use rules, information formats and other variables Accessing hundreds of data sources to verify identities online Complying with security, privacy and data regulations that differ around the world and change regularly In the competitive marketplace environment, fast, low-friction verification can provide a competitive edge. First impressions are crucial, and slow, complicated customer and vendor onboarding can lead to frustration and abandonment. Building a robust, trusted global platform requires sophisticated data, technology and expertise to foster confidence. Identity verification that quickly, accurately and compliantly vets vendors and customers can play a significant role in marketplace success. White Paper Beyond Compliance Build a safer, more profitable marketplace Share this Facebook Twitter Linkedin Get Link
Building a Trusted Online Marketplace Platform Online marketplaces enable people from around the world to buy and sell goods and services wherever and whenever they choose. The emergence of online marketplaces in all their different forms is transforming the global economy. Virtually connecting parties bypasses physical limitations, such as staffing and hours of operation, enabling marketplaces to quickly expand globally. But creating a successful marketplace requires replicating the trust people have when transacting in person and mitigating fears of misrepresentation or fraud. Developing a strong reputation of trust and safety is critical to growing a marketplace of vendors and buyers. What Is an Online Marketplace? An online marketplace connects buyers and sellers digitally through a website or app. Some online marketplaces replicate traditional buying and selling. Others act as a third party to match almost any need with a provider. Sharing Economy This is a marketplace for sharing assets. Airbnb, for example, matches accommodations with people looking for somewhere to stay. The sharing economy leverages existing resources without the demands of new financing and production. Gig Economy This marketplace enables contract work. Uber, for instance, matches drivers with passengers. The gig economy offers contract workers opportunities to generate income when they want. Direct to Consumer These marketplaces, such as Shopify, let businesses sell directly to people. The business might create a virtual storefront or list its products in a directory. Consumers have access to products when they want them through a cohesive interface. Peer to Peer These marketplaces, such as eBay, let people sell to people. While each online marketplace model is different, there are common factors: Enough vendors with the inventory to interest consumers Enough consumers to make it worthwhile for vendors An interface that simplifies navigating numerous listings The ability to quickly add, change or delete listings Listings with enough information to enable educated decisions Some of the biggest questions marketplaces make are: How anonymous will buyers and sellers be? How will reviews be handled? What other market-design choices will help or hinder trust in a listing? Marketplace success often depends on understanding what vendors and customers want and delivering an experience that helps them accomplish their goals. Industry Report Wary Customers Seek Reassurance From Online Marketplaces How marketplaces are refining their identity verification strategies to improve security, build trust and create reassuring experiences to better match changing customer expectations Marketplace Trust and Safety Programs Marketplace trust and safety programs protect customers and build organizations’ reputations as secure places to transact or interact. Social, operational and regulatory elements all factor in to establishing trust in a marketplace. Different global markets have different standards and expectations. Fraudsters constantly modify their schemes. High-traffic periods can overwhelm teams and technology stacks. The organizational structure determines who has responsibility for ensuring the marketplace’s integrity. Some positions that oversee trust and safety are: Risk officer — Validates and onboards buyer and sellers Compliance officer — Ensures compliance with various Know Your Customer (KYC), privacy and local regulations Trust and safety manager — Handles sensitive, complex user-facing issues Each employee’s actions and every company decision affects trust. Some of the more important considerations are: Code of conduct — What are the terms and conditions and how will the marketplace handle problems? Communication channels — How will buyers and sellers communicate? User experience — Do the design and interface promote trust? Verifying buyers and sellers — Are participants vetted? Verifying listing information — Are there procedures for checking listings? Payment options — Are payments handled by the marketplace, a third party or the participants? Customer support — Are questions answered quickly and completely? A trust-first philosophy can help marketplaces provide safe experiences that enhance their reputation and fuel growth. Industry Sheet Online Marketplaces Use identity verification to ensure a safe and secure community Verifying Marketplace Buyers and Sellers Marketplaces have varying approaches to anonymity and verification. Some put the responsibility on participants and have no identity verification or business verification requirements. That approach can present risks. “The lack of transparency and accountability in today’s digital marketplaces has contributed to the rapid rise of organized retail crime, which has become one of the top challenges facing the retail industry today,” said Alex Gourlay, former co-chief operating officer of the Walgreens Boots Alliance, and president, Walgreens. Regulations to enable trustworthy, safe and transparent online environments are gaining traction. In the European Union, the Digital Services Act, which requires marketplace traders be traceable, has become law. Under Article 22, Traceability of Traders, anyone selling or promoting goods or services on online platforms must provide: Name, address, telephone number and email address Identity documentation Bank account details (for a person) Registration number (for a business) Traders also must self-certify that they offer only products or services that comply with applicable laws. Many marketplaces now verify all participants to protect buyers, sellers and the company’s reputation. That approach helps reduce fraud, mitigate risk and increase trust in the platform. When marketplaces apply optimized vendor onboarding, the business relationship starts with trust and a positive experience, allowing vendors to quickly start transacting. A risk-based approach to onboarding, combined with technology that allows for adaptable, automated workflows, helps marketplaces minimize delays and maximize safety. Using identity verification for buyers indicates the marketplace wants only legitimate users on the platform. Identity verification also helps decrease security fears because it provides accountability. Case Study Building Trust and Safety Across Borders Grow a trusted global marketplace with verified users, buyers and merchants Growing a Global Marketplace Maximizing reach for a global audience often requires fast, secure onboarding. Each marketplace is unique. Understanding the different risks presented by vendors and customers and adjusting onboarding accordingly can minimize friction and maximize risk mitigation. A risk-based approach to onboarding provides that flexibility. It allows the marketplace to determine a market segment’s risk level and apply appropriate identity verification and due diligence. Factors that can pinpoint participant risk levels include: Transaction frequency Industry or market segments Expected transaction amounts Customer and merchant locations The initial risk level for opening an account might require verifying only a person’s name, address and birthdate. The risk level may rise and require further verification when transactions begin or hit a threshold. Seller onboarding may require additional steps to mitigate fraud, money laundering or other illegal activities. Typically, merchant onboarding involves: Prescreening KYC and identity verification History check Business and operational model analysis Web content analysis Information security compliance Credit risk underwriting The process also often depends on the marketplaces business model and risk-based approach. When platforms accept marketplace payments, revenue can increase but so can risk. Preparing for Marketplace Success The better a marketplace connects buyers and sellers, the more successful it can be. Combining data and technology can position marketplaces to improve those connections through insight into customer and vendor behavior. Marketplaces can create trusted platforms by applying agile, efficient verification strategies starting at onboarding. Identity and business verification can help uncover bad actors before they engage with the platform. Identity or business verification, though, can be complex, especially with a global audience transacting in a borderless economy. Verification includes: Determining the most effective data points and analyses Integrating different data, access requirements, system protocols, data use rules, information formats and other variables Accessing hundreds of data sources to verify identities online Complying with security, privacy and data regulations that differ around the world and change regularly In the competitive marketplace environment, fast, low-friction verification can provide a competitive edge. First impressions are crucial, and slow, complicated customer and vendor onboarding can lead to frustration and abandonment. Building a robust, trusted global platform requires sophisticated data, technology and expertise to foster confidence. Identity verification that quickly, accurately and compliantly vets vendors and customers can play a significant role in marketplace success. White Paper Beyond Compliance Build a safer, more profitable marketplace Share this Facebook Twitter Linkedin Get Link