Yuval Ziv: Firstly, it’s important to acknowledge how rapidly the marketplace model is growing on a global scale. In 2020, marketplaces saw an 81% higher growth rate than ecommerce and this is only set to increase.
Well-established ecommerce platforms in the UK are looking to evolve their business models to add new revenue streams. In 2022, ASOS, Debenhams, and Superdrug added marketplaces to their platforms. Even for such well-established brands, onboarding new sellers and adding new payment methods means payments will become more complex overall. And this is available for a myriad of other verticals, including service marketplaces (Treatwell), ridesharing (Uber and Gett), and B2B marketplaces.
The complexity of the payment cycle for marketplaces makes it an exciting space to be part of, and when designed and managed correctly, it has the potential to be a real competitive differentiation and a fantastic revenue accelerator.
Cas Paton: It’s no secret that the retail landscape is hugely competitive. Many have tried and many have failed to get traction. There’s still room in the market, but you have to identify and fill a need that still isn’t being met – and that’s exactly what OnBuy set out to do.
Most marketplaces seek opportunities at the expense of their sellers, rather than supporting their growth. It can often feel like a dog-eat-dog world out there, with monopolies typically coming out on top.
OnBuy was born out of that exact frustration; that other marketplaces weren’t taking a fair enough approach. By being a true marketplace – in that we never compete against our sellers by retailing our own products – we provide a platform that supports the success of the businesses who sell with us, while giving customers amazing choice, rewards that matter, and exceptional service, with no hidden costs.
Cas Paton: Marketplaces aren’t easy to get off the ground. It’s an industry that includes fierce competition from the outset and the barrier of entry is high. Consumers expect exceptional service with a seamless checkout experience.
So, to succeed in this market, you must make compromises. What that meant for OnBuy was starting without being the merchant of record. Holding seller funds, managing pay out, money flow, buyer risk, seller risk, reconciliation and data integrity are burdens that you just can’t resource at the start.
As such, there were limited options when it came to choosing a payment provider. We launched with Stripe initially, but we had outgrown what they could offer at the time. OnBuy became internationally recognised, all while being 100% PayPal driven. As we grew, however, we wanted to give our customers a seamless checkout experience, which wasn’t feasible with PayPal as our sole provider. Many marketplaces struggle to get to this milestone, but we were fortunate enough to reach the point where we could become merchant of record.
Yuval Ziv: Streamlining payments within a marketplace's end-to-end flow can take time due to the many moving parts involved. Onboarding many sellers in a short time, providing appropriate payment methods, handling split payments, processing payouts without hiccups, and dealing with reconciliation in a timely and accurate manner, are all crucial aspects of a marketplace's financial health. Fortunately, these obstacles also present opportunities for marketplaces to distinguish themselves if overcome successfully.
Inflexible payment processes must not be allowed to stunt a marketplace’s potential. At Nuvei, we provide marketplace operators with the required set-up to ensure payment success, every time. We want to ensure the flexibility of our marketplace payment model, whether that's us providing pay-in only, the operator managing KYC and Nuvei providing pay-in /out, or Nuvei managing the entire customer and seller experience from end-to-end.
Cas Paton: Once OnBuy had undertaken the structural, legal, and considerable development work to become a merchant of record, and once we were in control of the money flow from our customers to our sellers, the next step was to choose a suitable payments partner. We needed a partner that understood both our challenges today and could see our vision for tomorrow, and Nuvei was the right choice.
One of the benefits of Nuvei is localisation – we were able to launch extremely quickly with Nuvei thanks to that experience. Since deploying in early April 2023, we have already launched Visa, Mastercard, PayPal, Klarna, Clearpay, Google Pay, and Apple Pay. Nuvei’s gateway and team have turned our challenges into a frictionless execution for delivering ultimate service. Our customers now have more options than other marketplaces.
Nuvei has enabled OnBuy to deliver customers what they want, in the best way.
Cas Paton: OnBuy and Nuvei have great synergy. Nuvei’s international footprint is attractive to OnBuy, while OnBuy’s eagerness to grow strongly benefits Nuvei.
The latter has unlocked a future ecommerce leader in OnBuy, and OnBuy has evidenced how execution can be simplified with a leading global payment partner. Together, we have many opportunities to harness and a lot to play for, with international expansion being the next stage for our business.
Yuval Ziv: There’s not one payment service provider that can successfully support marketplaces at a global level. Our ambition is to become that payment partner for the industry.
Our technology is modular and flexible, and our business model allows us to customise our solution to suit the requirements of the businesses we work for. This means that we want to help marketplaces at every stage of their growth, whether they are just starting out or getting ready to scale and compete with large global players who have dominated the space for a long time. For example, we are looking at how card issuing and B2B financing can add value for marketplaces, so there are definitely exciting things on the horizon for this dynamic vertical.
Product innovation is at the heart of our business and our product is always evolving. By working alongside marketplace platforms like OnBuy and innovating bespoke solutions, we can build products that better serve the marketplace industry as a whole, as it continues to dominate the eCommerce landscape.
Cas is a driven business professional and founder and CEO of OnBuy, one of the world's fastest-growing marketplaces. His career is routed within various online industries, ranging from ecommerce, marketplaces and web development. While his experience is primarily built within online business, his fast paced and ever-dynamic career has brought forth foundations within retail, distribution, logistics, international sales and marketing.
Yuval Ziv has served as MD, Digital Payments since October 2019 after first joining SafeCharge (later to become Nuvei) in 2008. He was promoted to President of Nuvei in 2022. Over the course of his tenure at SafeCharge, he held positions of COO, CCO, MD and VP Business Development, in addition to serving as a board member and VP of Operations and Business Development at the Gate2shop division. Prior SafeCharge, Mr. Ziv was an Operation Manager at Formula Telecom Solution, a senior manager at MAFIL, and an Analysis team leader for Cellcom.
Founded in the UK in 2016 by Cas Paton, OnBuy has a simple vision: to be the best choice for every customer, everywhere. The brand has established itself in the ecommerce sector as a pure online marketplace that doesn’t compete with retailers. This fair and transparent approach provides an exceptional experience for buyers by levelling the playing field for sellers. Offering 35 million products, OnBuy gives thousands of verified online retailers the platform to provide competitive prices and exceptional value to customers. By understanding customers, OnBuy continues to deliver the shopping experience that they want again and again.
Nuvei (Nasdaq: NVEI) (TSX: NVEI) is the Canadian fintech company accelerating the business of clients around the world. Nuvei’s modular, flexible and scalable technology allows leading companies to accept next-gen payments, offer all payout options and benefit from card issuing, banking, risk and fraud management services. Connecting businesses to their customers in more than 200 markets, with local acquiring in 45+ markets, 150 currencies and more than 600 alternative payment methods, Nuvei provides the technology and insights for customers and partners to succeed locally and globally with one integration. For more information, visit www.nuvei.com
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