First, the payout to sellers triggers several sets of regulatory requirements that many marketplaces struggle to implement seamlessly. Just to name a few of these regs:
Second, marketplaces typically have a separate set of requirements from their payment processors or sponsor bank. When done poorly, the friction introduced by these checks results in lower conversion during seller onboarding or seller attrition due to slow payouts.
Marketplaces may choose to outsource these seller onboarding checks to accelerate their platform launch date, but asking 3rd party vendors to manage compliance checks effectively creates a data silo. Buyers are managed separately from sellers, though the ideal marketplace customer is a part of both groups: it is a virtuous cycle to have a buyer sell an item at a later date and purchase a replacement. To make matters worse, the buyer/seller data silo usually becomes permanent, as the decision to bring compliance checks in-house becomes deprioritized behind initiatives with clear revenue lift.
An outsourced onboarding can result in a degraded customer experience:
The hard work that was done to expand these buyer relationships is ultimately put at risk, with reduced conversion of buyers into sellers.
In our opinion, the best customer experience is delivered by a marketplace that can access all relevant customer information for a progressive onboarding process. Imagine this seamless seller onboarding experience:
Our platform’s ability to unify data, provide comprehensive customer context, and ultimately deliver the best customer experience for buyers and sellers means reducing fraud while generating revenue. We didn’t want to pick one or the other when we were merchants ourselves, and we built SpecTrust so others wouldn’t have to either. It is possible to do better for our customers. Read our marketplaces whitepaper to learn more.