Trust key to growth in online trading
By Peter Kihara
| Jan 24th 2017 | 3 min read
Online marketplace businesses are unique in the sense that they seek to bring buyers and sellers on board for win-win exchanges.
One of the common challenges facing these marketplaces is how to eliminate fear and distrust.
More often than not, customers engaging in the transactions are total strangers, which results in all manner of anxiety and questions like; what if I pay for the item and it’s never delivered?
What if the buyer runs away with my item without paying? What if someone hacks my account? Such fears, though justified, have the potential of creating a huge barrier to trade.
In order to build trust among customers, the business must make customer safety a priority. Users need to feel secure as they advertise, communicate with potential buyers and sellers and transact online.
Marketplace start-ups must have strategies and tactics that ensure trust across all their users. OLX, AirBnB, Uber, Lyft are some of the marketplace start-ups that have made trust and safety amongst their users a priority, something that has hugely contributed to their success.Various trust and safety strategies have been employed by successful startups and market places that have in turn yielded great success.
The quality of content in any online marketplace has to be exemplary; users don’t want to waste time trying to figure out whether the product or service listed is good or not.
Some firms have adopted strategies to ensure the quality of content is maintained by hiring experts who check all the content that goes through the platform and tools that users can use to report any unsuitable content.
The content team moderates the content that goes live and ensures it is up to desired standards. The reporting tools have empowered the online community of users to participate in making the online marketplace more effective and relevant to their needs.
The system is also able to detect fraudulent and malevolent activities and such users are automatically rejected and blacklisted. AirBnB has also promoted community policing whereby users are able to report on any shady apartments listed on the site.
Others have introduced a robust customer rating as well as a user verification system. A verified user will have a badge, which will act as a proof that the seller is trusted.
This is expected to increase buyer trust to a considerably high level, and will also encourage the sellers to deal in high quality products or services since they will fear losing a trusted account as a result of poor rating.
Uber, on the other hand, has a rating system where both the driver and the passenger are able to provide feedback about each other. This way, both parties are sure to conduct themselves in the best manner possible.
Initially, online classifieds were meant to connect buyer and sellers online, with zero control of the payment process. There has been a paradigm shift in the way marketplaces operate with regard to the payment methods. OLX is in the process of introducing an Escrow service aimed at providing a fast and secure transaction.
An Escrow, according to Dictionary.com is an arrangement where something (generally money or documents) is held in trust (“in escrow”) by a trusted third party until certain agreed conditions are met.
E-Bay for example, has an escrow service for eBay Motors escrow.com as their approved escrow service provider.
By having a system that is able to analyse and predict user behaviour, it becomes extremely difficult for fraudsters to penetrate and publish fraudulent adverts.
Building marketplace trust is a constant balancing act between safety and user friction.The best marketplaces trade off a level of friction for long-term user safety. Those that don’t put trust and safety first don’t make it.
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