Online platforms are an essential cog in the global ecommerce ecosystem. Even amid ongoing economic uncertainty, they continue to thrive by embracing strategic diversification and cross-industry integrations.
As platforms diversify by tapping into new verticals and business models, their growth depends on expanding their customer base, increasing user engagement, and simplifying their financial operations. The more complex their setups get, the more the latter starts to matter.
Recognising both the emerging challenges and opportunities of this diverse ecosystem, Mangopay’s latest industry guide, Building a successful platform with a wallet infrastructure, explores the evolving platform economy and the role of a wallet-based infrastructure in driving sustainable growth. The guide also highlights how platforms can leverage account-based ecosystems and embedded financial services to improve customer experiences and unlock new revenue streams.
As per Mangopay’s report, over the past five years, there has been a noticeable trend shaping up, with platforms making the shift towards integrating fintech solutions in order to provide personalised and unified experiences that help broaden their customer base and inspire brand loyalty:
‘Platforms with high-ticket prices are partnering with BNPL companies, making high-cost products and services more accessible to a broader audience. Similarly, on-demand platforms such as food delivery and ride-sharing services are introducing financial service branches aimed at providing tailored financial products and services to their users. These offerings often include digital wallets, real-time earnings tracking, and cashback rewards’.
From an operational perspective, a wallet infrastructure optimises money flows by making it possible to create separate wallet accounts for different transaction types, from user balances to platform fees and commissions.
This separation of funds offers the platform’s users more transparency over their funds and enables them to monitor their earnings, handle payouts, and get detailed financial insights.
Embedded services encourage customer loyalty and strengthen a platform’s account-based ecosystem. Platforms that leverage account-based ecosystems focus on registered members by offering loyalty perks and programmes. This strategy is key in building a community of engaged users.
A wallet infrastructure allows platforms to offer experiences that drive user retention and engagement. Options such as in-wallet apps for storing and transferring funds, loyalty programmes, exclusive deals and cashback, and flexible payment plans like Buy Now, Pay Later (BNPL) and cash in advance can address users’ needs and help them feel more connected to the platform.
More to this point, as per Mangopay's industry guide:
‘With unified experiences becoming the new standard, we’ll see a shift into a more interconnected ecosystem. By leveraging a wallet-based infrastructure, a modern platform can achieve agile and scalable operations in a single ecosystem’.
The complexities around revenue collection (payins) and disbursements (payouts) are two of the biggest challenges online platforms and marketplaces face. An agnostic wallet infrastructure makes it possible for platforms to leverage a single wallet account to collect funds from various sources and later program it for payouts and split payments.
This feature enables platforms to avoid using reconciliation solutions provided by payment service providers (PSPs) or having to develop their own revenue-sharing logic.
Besides enabling platforms to use digital wallets for their customers so they can store, send, receive, convert, and split funds, a wallet infrastructure can also be leveraged by platforms to capture additional revenue streams, such as generating revenue from currency conversions between wallets or transfers between accounts.
‘Payment flows that operate outside of a wallet infrastructure might limit customisation and revenue potential. Furthermore, e-wallets' ability to hold funds indefinitely due to their EMI license grants platforms greater flexibility to retain funds within their ecosystem when necessary.’
The platform economy has evolved into a complex, interconnected ecosystem, presenting both new challenges and significant opportunities. Platforms today operate in multi-party environments that require flexible and dynamic fund management solutions. What's more, payments are no longer just a cost centre, but a monetisation asset. And as more platforms expand internationally, cross-border payments and currency conversion become key aspects of the business. Considering these factors, Mangopay’s latest industry guide underscores the potential of a wallet infrastructure to tackle the current challenges platforms are facing and to help them meet the opportunities that lie ahead.
Don’t forget to download your free copy of Mangopay’s ‘Building a successful platform with a wallet infrastructure’ industry guide to learn more about this subject.
Diana (Lupuleac) Vorniceanu is a Senior Editor at The Paypers. She has an extensive background in content creation and is a graduate of Foreign Languages and Literature studies, currently specialising in payments and ecommerce. She strives to bring forward the latest trends for our readers, while investigating the ever-evolving landscape of cross-border payments, global ecommerce, payments for marketplaces and online platforms, and emerging technologies across the globe. You can reach Diana via email at diana@thepaypers.com or on LinkedIn.
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