{"componentChunkName":"component---src-templates-blogpost-tsx","path":"/blog/the-sharing-economy-when-will-payments-catch-up","result":{"pageContext":{"isCreatedByStatefulCreatePages":false,"id":"137936cb-1f27-5f00-a2e7-129cf6741c37","title":"The Sharing Economy: When Will Payments Catch-Up?","slug":"the-sharing-economy-when-will-payments-catch-up","published":"2017-06-22T00:00:00.000Z","author":"Dan Whale","content":"\nThe sharing economy is skyrocketing in a way which is transforming how we live our lives, yet its payment aspect remains stuck on the ground.\n\nThe emergence of the sharing economy has been difficult to ignore. Online marketplaces such as Etsy, Depop and Gumtree have become ever-more popular, especially amongst millennials, but this presence goes far further than simply online shopping. Uber has globally revolutionised hailing taxis and AirBnB has swiftly become one of the most favoured forms of booking holiday accommodation. \n \nWith retail, travel and holidays being suitably disrupted, other industries are entering the space. Sites like TaskRabbit allow you to offload your DIY jobs to a willing helper, and everyone from graphic designers to dog sitters can now be found in a similar way to your next holiday. \n \nSo why is this form of trading so successful? Put simply, it removes the middleman between merchant and consumer, benefiting them both. Merchants are able to sell their product/service more easily and consumers have access to a larger, more diverse market. This gives the consumer the most powerful gift - choice.\n\n\n![](https://paybase.imgix.net/blog/the-sharing-economy-when-will-payments-catch-up-growth.png)\n[Growth in the Sharing Economy. Source]\n\n\n## So what is holding the sharing economy back? \n \nWhilst the growth of the sharing economy cannot be ignored, this is not to say there are no challenges facing platforms facilitating the sharing economy. The processing of payments still remains a massive challenge to online marketplaces. \n \n> Entrepreneurs will often divert the majority of their time and resource to the development of the marketplace app or website, and underestimate the difficulty involved in the getting the payments component right. \n \nDue to the antiquated nature of payment processing, marketplaces are presented with four options for their payments requirements.\n\n\n### Option 1: The easy option\n\nFirstly, they can avoid the hornet’s nest altogether and create a platform that does not support payments, as Gumtree does. This discourages consumers who are unable or not willing to travel to collect items and also limits what is likely to be bought on the site. Many people will not want to go to a carpark at 11pm to pick up a laptop, for example. Gumtree even offer safety tips on buying and their number 1 FAQ is ‘How to spot fake bank notes’ - not a great way to instill confidence in a purchase and give a feeling of security. \n\n### Option 2: The PSP/Acquirer hassle\nSecondly, marketplaces can decide to take payments by partnering with a PSP/Acquirer. This requires both knowledge and experience with accounting to provide the manual reconciliation to their sellers. As a marketplace grows, ensuring all sellers receive their profit in a reasonable timeframe can require large amounts of work and become costly. \n\n\n### Option 3: The UX faux pas\nThe option of partnering with PayPal normally involves leaving their platform to make a payment. Statistics show that 69% of all online transactions are abandoned, and as such businesses are starting to focus on how to improve their conversion rate[1]. Handling payments this way can be seen as the ultimate UX faux pas.\n\n### Option 4: The DIY way\nFinally, if a marketplace realises that the first three options are poor they may seek to create their own eMoney infrastructure (see what is involved below) as Airbnb did. \n\n![](https://paybase.imgix.net/blog/the-sharing-economy-when-will-payments-catch-up-route.png)\n\nIt’s a solid way to go, if you can afford to pay many in-house experts and spend months putting all integrations in place, waiting for your EMI licence to be granted and to building up your internal Risk and Compliance team. Depop will tell you that setting up your own eMoney system is not easy. They created the Depop Wallet in November 2015 and halted any new accounts a year later due to safety concerns.\n \nNever fear, there IS another option…\n\n### Option 5: Power your marketplace with Paybase\n \n
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A much faster, simpler, more secure and UX friendly solution to meet the needs of the rapidly growing sharing economy is eMoney infrastructure that can be integrated through one unified API.

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This is where Paybase delivers!

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We are centered around supporting and driving innovation to aid this growth by facilitating payment processing for marketplaces.

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So how can the Paybase Platform make things easier?

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Paybase offers easy to create, segregated eMoney accounts that allow merchants to be paid directly and securely. This eliminates the need for reconciliation yet allows the marketplace to retain total control of the money, easily taking their percentage for use of their platform.

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With our proprietary Rules Engine, the marketplace can define logic for every transaction to determine a set fee or percentage to be taken from that transaction.

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Our solution will not take consumers away from the marketplace to complete their purchase, helping to reduce the 69% abandonment rate. Not only this, but it will run entirely in the background, allowing the payments element to be branded identically to all other parts of the platform. Simple, effective, beautiful UX.

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In short, we allow marketplaces to concentrate on growing their core business by making payments simple for merchants, consumers and the marketplaces themselves.

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Paybase loves innovation and we’re excited to see which industry will be re-energised next by the sharing economy. However, by leaving payments as an afterthought companies entering the sharing economy may find themselves in far more difficulty than they need to be.

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\n\nIf you like what you read and are interested to find out how we can help you with your payments, compliance and risk requirements - [get in touch](https://paybase.io/#get-in-touch). We’d love to hear from you. \n\nFollow us  Twitter  LinkedIn  Google+\n\nReferences
\n[1] [https://blog.salecycle.com/stats/infographic-remarketing-report-q3-2016/]\n","excerpt":"\nThe sharing economy is skyrocketing in a way which is transforming how we live our lives, yet its payment aspect remains stuck on the ground.\n\nThe emergence of the sharing economy has been difficult to ignore. Online marketplaces such as Etsy, Depop...","cover":{"src":"https://paybase.imgix.net/blog/the-sharing-economy-when-will-payments-catch-up-hero.png","alt":"need one"},"link":{"to":"/blog/the-sharing-economy-when-will-payments-catch-up","copy":"Read more"},"tags":["Sharing Economy","Payments","Challenges"],"related":[{"id":"a1a4dda6-fedd-5717-84c6-3480a51b7e5d","title":"The A to Z of crypto jargon","slug":"crypto-jargon","published":"2020-01-31T00:00:00.000Z","author":"Gemma Doswell","content":"FUD, HODL, dApps and more - what does it all mean? There’s a lot of jargon in the cryptocurrency industry, and it’s difficult to make head and tail of it all. We’ve compiled a comprehensive list of terms, early pioneers of the crypto industry and acronyms that will help you begin to make your way through the confusion.\n\n![](https://paybase.imgix.net/blog/crypto-jargon.png)","excerpt":"FUD, HODL, dApps and more - what does it all mean? There’s a lot of jargon in the cryptocurrency industry, and it’s difficult to make head and tail of it all. We’ve compiled a comprehensive list of terms, early pioneers of the crypto industry and acr...","cover":{"src":"https://paybase.imgix.net/blog/spelling-blocks.jpg","alt":"need one"},"link":{"to":"/blog/crypto-jargon","copy":"Read more"},"tags":["Cryptocurrency","Digital Currency","Payments"]},{"id":"a87d4293-8f8b-510d-b70f-d7b056b0bc42","title":"An award-winning Risk Suite","slug":"award-winning-risk-suite","published":"2020-01-20T00:00:00.000Z","author":"Gemma Doswell","content":"In October 2019, our Risk Suite was awarded the Outstanding New Product Award by the [Tackling Economic Crime Awards](https://thetecas.com/2019-winners/) (TECAs). Our Head of Compliance, Rachel Coote, accepted the award at the ceremony in London.\n\n![](https://paybase.imgix.net/blog/tecas-award-rachel.jpg)\n\nTECAs is an independent organisation looking to recognise those working towards combatting any area of economic crime. They celebrate outstanding performers, from buyers to suppliers, and base their criteria for recognition on extensive research in the risk management space.\n\n## What is the Risk Suite?\n\nThe Paybase [Risk Suite](https://www.paybase.io/how-we-do-it) is our three-pillared financial crime prevention framework. It is made up of our Risk Engine, our Rules Engine and our Onboarding Engine. In today’s technologically-driven landscape, [Finextra](https://www.finextra.com/blogposting/18089/finding-bad-actors-how-tech-is-helping-root-out-financial-crime) asserted that “Information is the lifeblood of financial crime investigations.” Our Risk Suite enables our clients to collect and analyse any relevant information about their users, safeguarding them against the increasingly prevalent threat of financial crime in payments. Keep reading to learn more about the state-of-the-art functionality of each engine and how we use them to evaluate risk and to identify and prevent bad actors.\n\n## The Risk Engine\n\n![Risk Engine](https://paybase.imgix.net/blog/risk-engine.png)\n\nThe [Risk Engine](http://paybase.io/how-we-do-it/#riskengine) evaluates the financial risk of each user and transaction that occurs on the Paybase Platform. It uses a real-time scoring system based on unique entities (such as customer names, addresses, cards, bank accounts etc.) to monitor and manage the risk of financial crime. If a customer adds a card and an address associated with this card, for instance, and another customer adds the same card and address information, our Risk Engine generates a risk score based on this information. Factors like geographic risk or IP clusters are also taken into account to calculate the risk score.\n\nOnce this data is collected, we can analyse it in a giant interconnected web as in the image above.\n\n## The Rules Engine\n\n![Rules Engine](https://paybase.imgix.net/blog/rules-engine.png)\n\nOur [Rules Engine](http://paybase.io/how-we-do-it/#rulesengine) is one of our flagship features. It not only gives our clients access to unprecedented levels of flexibility for product enhancement but it furthermore safeguards them with a critical level of security in their transactions.\n\nBuilt into the Rules Engine are over 100 custom-built rules templates, within which are hundreds of individual rules. They can be instantly configured and combined to serve myriad use cases. For risk management purposes, Rules are used to detect and prevent financial crime. We can configure them to flag unusual spikes in activity, for instance, or automatically block a transaction that is going to a high risk or sanctioned jurisdiction.\n\nUtilised to its full capacity, the scope for the Rules Engine to safeguard a platform business against financial crime is significant.\n\n## The Onboarding Engine\n\n![Onboarding Engine](https://paybase.imgix.net/blog/onboarding-engine.png)\n\nThe [Onboarding Engine](http://paybase.io/how-we-do-it/#duedilligence) is our custom-built Customer Due Diligence (CDD) Processor. Utilising a tiered framework, we request user information based on the level of risk associated with each user - and this can be done on a client-by-client basis.\n\nIf a platform, for instance, needs to perform a particularly high level of CDD on a group of their users but a more measured level of CDD on the rest of the users, we can request X from one user type and Y from another. Furthermore, with real-time transaction monitoring, we can automatically request additional information from merchants or users as the amount of money that they are operating with (and therefore their level of risk) increases.\n\nThis enables our clients to perform strong Due Diligence on their users without ever negatively impacting UX.\n\nWant to know more about how we could help you secure your transactions? Get in touch [here](https://paybase.io/get-in-touch)!","excerpt":"In October 2019, our Risk Suite was awarded the Outstanding New Product Award by the Tackling Economic Crime Awards (TECAs). Our Head of Compliance, Rachel Coote, accepted the award at the ceremony in London.\n\nTECAs is an independent organisation loo...","cover":{"src":"https://paybase.imgix.net/blog/tecas.png","alt":"need one"},"link":{"to":"/blog/award-winning-risk-suite","copy":"Read more"},"tags":["Financial Crime Prevention","Payments","Due Diligence"]},{"id":"4963669b-c604-589b-861c-3785caa057cb","title":"An Interview With SEUK","slug":"seuk-interview","published":"2019-12-04T00:00:00.000Z","author":"Gemma Doswell","content":"We caught up with Olivia Knight, Chair of [SEUK](http://www.sharingeconomyuk.com/) and Founder of [Patchwork](https://patchworkit.com/). Here’s what she had to say.\n\n## Could you give me a brief introduction to you?\n\nI’m Olivia, I’m the chair of SEUK and have been since March 2019. I joined as a member two years ago before being elected to the board and then this year being elected as chair. I was appointed because I’m also the Founder of Patchwork, a sharing economy business.\n\n## What is SEUK?\n\nSEUK is a trade body. We represent the sharing economy - UK platform businesses that enable people to trade their space, skills or their stuff. We have 32 members who range from startups to scale-ups to larger corporations.\n\nAs a trade body, we’re quite unique. By representing platform businesses, we have a dual audience. For our own business to survive, thrive and prosper, we must represent both the interests of our sharing economy business members andthose of the people who use their platforms. And it’s a fast-growing industry - a 2018 [survey](https://www.wbs.ac.uk/news/uk-sharing-economy-usage-rises-by-60-per-cent/) found that 78% of 18-24-year-olds used sharing economy services.\n\n\n\n![18 - 24 year olds and shareing economy services](https://paybase.imgix.net/blog/seuk-infographic.png)\n\n## What are the aims of the SEUK?\n\nWe exist to celebrate the common sense benefits of sharing. These include sharing resources and collaborating across platform businesses; enabling people to generate revenuefor themselves as individuals or as businesses within the sharing economy; reducing the need forownership and so reducing waste for the planet. We represent a whole range of different productsand services so it’s very difficult to define our members according to a particular vertical. Instead, we define their common principles around empowering people to utilise resources and to reduce waste.\n\n## Are there any difficulties faced in the sharing economy that the SEUK hopes to resolve?\n\nA lot of the work that we’re doing in this coming year is around productivity. This iskey for the UK economy and also for the Confederation of British Industry (CBI). The SEUK is enabling individuals and companies to be flexible and productive whilst still promoting both workers’ rights and the environment.\n\nAnother challenge is ensuring that people understand the distinction between the sharing economy and gig economy businesses. The gig economy is a labour model whilst the sharing economy is a business model. We represent some gig economy businesses that operate within the sharing economy but not all sharing economy businesses use gig economy labour. Media reporting often leads people to think they are one and the same thing and this can be a challenge for us.\n\nTrust is another major factor: making sure that people have trust in the sharing economy. We’re seeing more and more that whilst people and consumers are quite mistrustful of global corporations, they’re putting increasing trust into each other. It’s surprising to think that people will go and stay in a stranger’s house for a weekend, lend a stranger their car, rent out their wedding dress etc. so we have to make sure that the platforms enabling people to do this aretrusted. We do this in two ways: with our trust seal and with our guidelines that members sign up to.\n\n* **The trust seal** - We have to make sure that all of the security elements, the legalelements, the insurance, the safety and the payments are secure and safe - and our trust seal process is a really good way to ensure this.\n\n* **SEUK guidelines** - SEUK has a set of principles and guidelines in practice that members have to sign up to. We define ourselves not just as what we stand for but also by what we’re against.\n\nThe final challenge is being able to develop profitable businesses. For us, sharing economy businesses are just naturally well-positioned to do that.\n\n![Why Share?](https://paybase.imgix.net/blog/seuk-sharing.png)\n\n## What do you think has enhanced trust in the sharing economy?\n\nPart of it is atrend of global tech enabling us to become hyper-localised. There’s a sense of trust in your local communities that global platforms can offer e.g. using a global platform like Gumtree to buy something locally. I also think that there’s a lot that tech can do e.g. on platforms like Paybasethat enable people to feel secure about payments.\n\nWe also feel a lot that the value of the sharing economy is not just that people get a cheaper stay with Airbnb or a better bargain on Depop or eBay, but they feel value in connecting with someone. In a digital age where we feel very remote, people want to make real-world human connections and platform businesses enable us to do that.\n\n## Do you have any specific aims while you’re in the post?\n\nWell,whilst people are excited by this new, disruptive sector, I want to communicate that it’s the oldest economy in the world. Before we had money, the whole world traded and swapped and bartered and shared. Technology has just enabled platform businesses to make that easier, more safe, more secure, more efficient and more fun for people. The first job for us is, therefore, to encourage people to embrace it.\n\nOur key campaigns this year are about sustainability, community and productivity. If we’re going to have a planet that we can all live and thrive on, we are goingto need to consume less and have less of an obsession with ownership. Sharing is crucial for ourfuture survival and it’s integral to our history. There’s a huge amount that the sharing economycan contribute to our economy particularly in post-Brexit UK. We’re living in a country that feels very, very divided and sharing economy platforms are one way to open doors, to connect people and to thereby support communities on and offline.\n\n## And finally, we’d love to hear about Patchwork. How does it work?\n\nSure! Patchwork is a sharing economy business that lets friends come together to contribute towards one big gift or an experience. You can use the site to fund group gifts for any occasion from birthdays to new babies and Bar Mitzvahs. You can also ask people to contribute time and skills to help organise events from DIY weddings to Christmas parties or hen dos. It’s a super-flexible platform that enables people to collectively fund, make and do stuff to help make something amazing happen. Like magic really. We quite literally helpmake people’s dreams come true!\n\nCheck out Patchwork [here](https://patchworkit.com/) and don’t forget, to stay up to date with the latest news and events from Paybase, scroll down tosign up to our mailing list.\n","excerpt":"We caught up with Olivia Knight, Chair of SEUK and Founder of Patchwork. Here’s what she had to say.\n\nCould you give me a brief introduction to you?\n\nI’m Olivia, I’m the chair of SEUK and have been since March 2019. I joined as a member two years ago...","cover":{"src":"https://paybase.imgix.net/blog/seuk-hero-image.jpg","alt":"need one"},"link":{"to":"/blog/seuk-interview","copy":"Read more"},"tags":["SEUK","Sharing Economy","Interview"]}]}}}