What are marketplaces? 

The past decade has seen a vast growth in this relatively new sector. In fact, the marketplace concept has become so wide and all-embracing that there are many varying definitions of what the term actually means: there are pure-player marketplaces, there are retailers opening their websites to third-party sellers, there are gig economies, shared economies, franchises, business-to-business platforms, and new-age procurement platforms – to name just the main models. 

But the term is also used for a ‘yellow pages’ type of services, checkout platforms, and even international retailers. For the purposes of this discussion, let us focus on the following definition: marketplaces are online platforms which enable purchases of goods or services by multiple buyers, from multiple sellers, from marketing to facilitating the payment. 

By the nature of acting as a platform and processing the payment for goods and services, marketplaces are usually in scope for seller risk and transaction fraud. And because of the longer ‘value chain’, or the number of parties involved in these payment transactions, there can be ambiguity as to whose responsibilities lie where.

The fact is that both the marketplaces and their payment providers need to be aware of the risks involved. Let us consider these in more detail under the following two headings. 

Masha Cilliers is a Specialist Partner at Be | Shaping the Future as well as a Board Advisor to Limonetik, Principal Consultant at Payment Options Ltd, and a Non Executive Director at two UK fintechs, PaySME and Trust Payments.

What are marketplaces? 

The past decade has seen a vast growth in this relatively new sector. In fact, the marketplace concept has become so wide and all-embracing that there are many varying definitions of what the term actually means: there are pure-player marketplaces, there are retailers opening their websites to third-party sellers, there are gig economies, shared economies, franchises, business-to-business platforms, and new-age procurement platforms – to name just the main models. 

But the term is also used for a ‘yellow pages’ type of services, checkout platforms, and even international retailers. For the purposes of this discussion, let us focus on the following definition: marketplaces are online platforms which enable purchases of goods or services by multiple buyers, from multiple sellers, from marketing to facilitating the payment. 

By the nature of acting as a platform and processing the payment for goods and services, marketplaces are usually in scope for seller risk and transaction fraud. And because of the longer ‘value chain’, or the number of parties involved in these payment transactions, there can be ambiguity as to whose responsibilities lie where.

The fact is that both the marketplaces and their payment providers need to be aware of the risks involved. Let us consider these in more detail under the following two headings. 

Masha Cilliers is a Specialist Partner at Be | Shaping the Future as well as a Board Advisor to Limonetik, Principal Consultant at Payment Options Ltd, and a Non Executive Director at two UK fintechs, PaySME and Trust Payments.


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