Aran Brown, Managing Director of Europe, Hyperwallet
For e-commerce marketplaces, user experience has long been a prime focus. From aesthetic quality to ease of use, UX plays a major role in determining whether consumers stick with the platform long-term or abandon it in favor of a competitor. You’ll generally find that the most successful e-commerce companies—Amazon, eBay, Etsy—have done a terrific job designing a UX that keeps users engaged and works to prevent attrition. Still, there’s a nagging element of the overall e-commerce UX that few companies have truly conquered: the PX, or payout experience, of their sellers.
When e-commerce marketplaces talk about improving their sellers’ PX, they’re often referring to one thing: speed. Typically, that means sending payment straight to the seller, preferably by direct bank deposit. In this way, marketplaces can avoid potential delays by intermediaries and ensure that sellers get their money as quickly as possible. The logic here is sound, as speed is obviously a crucial element of the PX—but it’s not everything. By focusing exclusively on faster delivery, these marketplaces often fail to take other elements of the PX into consideration.
New e-commerce, new PX
Let’s consider some of the ways in which the changing e-commerce landscape has affected PX. First, there’s the growing competition amongst e-commerce marketplaces. It used to be that marketplaces focused predominantly on the consumer—specifically, how to draw them away from any competitors. From customer-centric experiences in brick-and-mortar stores to improved online e-commerce opportunities, marketplaces have done everything in their power to optimize the buyer experience and create an immersive omni-channel environment.
Today, as the number of two-sided digital platforms has grown and opportunities for suppliers have increased, the battle has shifted from the buyer to the seller. Marketplaces have come to recognise that in order to maintain a healthy user ecosystem, the supply-side experience needs to be just as sticky as that of the demand-side.
Then there is the pace at which e-commerce sellers’ expectations around payments are changing. When eBay, Amazon, and other e-commerce pioneers were getting started in the 1990s, most sellers were perfectly content with receiving a cheque or even cash; face-to-face, hyper-local transactions were the norm.
Soon, marketplaces began offering digital bank transfers, which became—and continue to be—the dominant method of payment. But as sellers’ payment expectations have continued to evolve, the demand for alternative payment methods has grown significantly. Modern e-commerce platforms need to offer a diverse range of payout methods—bank transfers, prepaid cards, direct payments to existing credit/debit cards—to remain competitive.
Finally, there’s the rate at which e-commerce marketplaces are scaling. Advances in connectivity and financial infrastructure—particularly in developing regions—have made it easier for platforms to penetrate new markets than ever before. This has allowed e-commerce companies to unlock entirely new seller communities, which has—in turn—introduced new sets of cultural and regional expectations around payments.
For example, a UK-based e-commerce seller might prefer to receive their payment via GBP bank transfer. That won’t work for an unbanked seller in Malaysia, who will need to be paid via either cash pick-up or a prepaid card in MYR. Complications such as this create significant onboarding friction and can prevent entire seller communities from participating on the platform.
Seller PX: It’s All About Choice
These developments, taken together, have had a dramatic effect on what constitutes an ideal PX. E-commerce sellers are no longer content to be pigeonholed into just one or two payment methods—they want the ability to choose the payout method that’s most convenient to their unique situation, and they want their earnings to be made available in their local currency. And let’s not forget: they want it to be fast.
Regulations and legacy banking networks make it very diffiuclt for marketplaces to create this ideal PX on their own. It takes a specialized payout platform—one with a proprietary network and advanced suite of APIs—to even come close. At Hyperwallet, for example, we use a Virtual Account Architecture (VAA) that enables our clients to disburse earnings in a way that provides greater seller control over the PX. Sellers can view their funds, choose their preferred delivery method, and cash out at their own convenience.
They can also manage their payment preferences, track delivery times, and monitor transaction history. This provides a level of flexibility over the payout experience that direct deposit simple cannot offer, giving e-commerce companies a competitive edge and boosting seller affinity for the platform. And, by implementing value-added services—for example, tax support and earnings-based rewards programs—marketplaces can further establish loyalty in their seller community.
Just as consumers expect quick and easy payment optionality when making a purchase, sellers are now demanding the ideal experience when it comes to their payouts: real-time, self-serve, multi-currency, even advanced payments. PX matters more than ever before, and it’s time for marketplaces to make it a priority.
Aran Brown is Managing Director of Europe at Hyperwallet, a leading global payouts provider for marketplaces that pay independent workers, sellers, and distributors. A payments industry veteran, Aran has more than a decade of experience in senior roles with FC Exchange, Western Union Business Solutions, and Skrill, among others.
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