The e-commerce sector continues to diversify and evolve, adapting to the ever-changing consumer demands of the consumer, in particular with regards to alternative payment methods.
Derrick Lynagh, Head of Sales and Partnerships at Mangopay, spoke to Payment Expert on the diverse e-commerce market and what the payment provider is doing differently through various offerings and partnerships.
Payment Expert: Firstly, what key payment trends and developments have you observed that have contributed to the monumental growth of the e-commerce sector?
Derrick Lynagh: The e-commerce sector has been gaining momentum since COVID. Leading this move are marketplaces, which accounted for the largest share of online purchases worldwide since 2022.
The growth of e-commerce has brought about a significant transformation in the payments industry landscape. To keep pace with the rapidly evolving market demands and payment volumes, new payment methods such as e-wallets and mobile payments are gaining popularity, offering consumers and businesses greater convenience, security, and flexibility.
We also see more demand for embedded finance as traditional banking models fall short in offering built-in financial solutions like BNPL for B2B e-commerce and comprehensive merchant services.
Moreover, in an effort to provide customer-centric experiences more efficiently, we’ve seen a shift towards the use of flexible payments infrastructure through APIs to strike the balance between delivering best-in-class experiences, scalability and speed of development.
Payment Expert: How has the Mangopay – Hokodo partnership helped B2B firms improve their payment infrastructures?
Lynagh: The sales revenue of B2B e-commerce transactions of physical goods in the UK was $187bn in 2021 and is expected to reach $301bn in the coming years, and yet the B2B sector is still underserved by today’s payment industry.
B2B transactions are often more complex than B2C transactions. It involves larger order value, longer payment terms and multiple stakeholders in the payment process. This complexity makes it difficult for traditional payment providers to cater to the specific needs of B2B businesses. We’re changing that by partnering with Hokodo.
Combining Mangopay’s flexible payment infrastructure with Hokodo’s offering will help us serve B2B platforms and marketplaces with more tailored solutions.
Through Hokodo, B2B platforms and marketplaces using Mangopay would be able to grant instant trade credits while letting sellers get paid upfront or whenever they need.
Moreover, B2B platforms and marketplaces can manage B2B payment flows within the same ecosystem, from payment collections, seller payouts and marketplace operators’ commissions, enabling funds to flow smoothly.
Payment Expert: During current economic uncertainty, how can retailers expand upon their supply network to not only be stable but also flourish?
Lynagh: An economic downturn could pose a risk of disruption for retailers. Diversifying their supply chain can help mitigate this risk and ensure that they always have the products their customers need.
Retailers should partner with a variety of suppliers whether local or international. Local suppliers may offer shorter lead times and lower shipping costs and offshore suppliers, bulk and varied supplies at a lower cost. Retailers should also be aware of the importance of partnering with well established logistic partners that offer wider reach and are transparent with their costs, taxes and shipping estimates.
Additionally, putting customers first can foster trust and drive repeat purchases. For example, selecting higher quality, sustainable products that last longer is now becoming more sought after. Even though this requires retailers to look at a wider range of suppliers to get access to high quality products and navigate logistics complexities, it could make a huge positive impact on customer satisfaction and brand recognition.
Mangopay plays an important role in this by providing our B2B clients with payment capabilities such as multi-vendor basket and automated split payments that allow them to streamline processes for retailers who are looking to diversify their supply chain.
Payment Expert: Can you outline some of the advanced payment methods Mangopay provides to enable wholesalers from high-value and high-volume transactions?
Lynagh: Mangopay enables wholesalers to accept and manage financial transactions in high volumes through our customizable and compliant solutions. Mangopay’s solutions can help simplify the needs of wholesale marketplaces, facilitating stock management and retail supply chains.
For example, we manage multi-vendor baskets, helping to split payments to multiple vendors or suppliers. Our e-wallets can be used to integrate logistics partners in the workflow and speed up partners’ payment processes. Additionally, we can easily connect wholesalers with a Buy Now Pay Later (BNPL) payment partner such as Hokodo, to provide flexible payment terms to buyers while sellers get paid upfront.
Moreover, our multi-currency support for pay in and payout removes the challenges of managing cross-border transactions and mitigates FX risks while keeping B2B trades safe through global seller verification support.
An example of a wholesaler that has driven growth by using Mangopay is Paris Fashion Shops. The company has become a leading B2B fashion wholesale marketplace by leveraging our powerful e-wallet technology to continually bring more value to its clients while focusing on its core activity.
Payment Expert: Lastly, and thank you for your time, where do you think we’ll see further payment innovation in the marketplace economy?
Lynagh: Recommerce is emblematic of the thriving circular economy, with companies like Vinted leading the charge. Bolstered by the global pandemic, growing concerns about sustainability and now, increasingly as a result of the cost-of-living crisis, consumers are turning to resale and making collaborative marketplaces a mainstream market.
If operators are going to convert new visitors into repeat users, they must ensure that every aspect of the purchase process is seamless – including payments. This means providing an array of payment methods to suit all users’ preferences, whether they are buyers or sellers.
Moreover, companies are becoming more global and as the challenges in managing international payments become more apparent, we’ll see innovations on global payment solutions that remove barriers for marketplaces to expand. We’re taking a big step ahead of this with the launch of our end-to-end FX solution that will not only revolutionise how platforms and marketplaces accept and manage payments in multiple currencies, but also unlock a new revenue stream.
At Mangopay, we’re doubling down on client-centric efforts and building best-in-class technologies to cater to their needs. We constantly listen to our clients and the market dynamics to ensure that our products are always relevant. This means remaining agile.
Our flexible and modular approach is a strong foundation for that.
Additionally, we’re investing in capabilities that will help our clients grow, from expanding to new markets, removing regulatory barriers to developing new products that create new revenue streams.