Increasing access to the circular economy with payments

Interview with Francesc Altisent, VP of Payments, Mangopay

How are marketplaces and platforms that Mangopay supports driving the shift towards a circular economy?

FA: Innovation in payments has revolutionised the revenue models for marketplaces and platforms. Not so long ago, they would make money by selling advertisements or premium spaces on their listings. Now, thanks to increasingly sophisticated payment infrastructures built for marketplaces – such as the solutions Mangopay provides – they are able to offer buyers and sellers a complete payment flow and generate revenue from every transaction. 

The US recommerce sector is on track to hit a mind-blowing $245 billion by 2025 according to Statista, representing a significant contribution to global e-commerce sales. A Future Market Insights report claims that secondhand goods sales in Europe are expected to reach US$ 71,903.2 million in 2024, indicating that this isn’t just a trend; it’s a booming movement for consumers across the globe.

What role do payment systems play in making sustainable marketplaces more accessible to a broader audience?

FA: Seamlessly integrating payment processing into platforms such as a secondhand marketplace can bring many advantages for businesses. As well as vastly improving the user experience and therefore conversion and retention, integrated products help platforms diversify revenue streams and accelerate cross-border growth. 

Platforms are able to incentivise users by offering enticing rewards, such as loyalty points and discounts. Such incentives not only make a positive environmental impact but also provide consumers with tangible benefits and help grow the circular economy. 

How do economic factors like inflation affect consumer payment preferences and the growth of sustainability-first economies?

FA: Everyone is aware of the impact of the increased cost of living in recent years, which has led to growing numbers of consumers looking for new ways to save or earn some extra money.

A report last year from online thrift marketplace ThredUp Inc highlighted a 28% increase between 2021 and 2022 in the secondhand industry, citing “a surge in inflation” as the main contributing factor. 

Then there’s the eco-conscious consumer. A growing number of people are mindful of the environmental impact of buying from new and are making choices which will limit their carbon footprint. 

What are the main challenges facing businesses in these markets, and how can they be addressed?

FA: Integrating multiple payment methods and platforms can be difficult, leading to increased maintenance costs and potential errors. Complex payment stacks can lead to suboptimal user experiences, especially as there is greater risk of refunds, chargeback and fraud from both the merchant and consumer side. Additionally, higher operational costs can impact customer satisfaction and financial efficiency.

This is one way in which Mangopay’s modular and flexible offering has been able to support our clients – by working closely with clients to create solutions that solve their specific requirements, while ensuring a compliant and user-friendly experience.

What advice would you offer to businesses aiming to capture broader audiences in the circular economy?

FA: Quite simply, it’s a case of making your platform as accessible and easy to use for as many people as possible. Users are looking for value but also a great experience. If their preferred payment method is not offered, they are less likely to make a purchase. If their preferred currency is not available, the same applies. If they feel the transaction is not secure, they will be scared away. This is why it’s so important to have a frictionless payments experience for your users. 

How can companies effectively build a payments ecosystem that meets the demands of future generations?

FA: As everyone in our industry knows, payments trends shift so fast, as user habits and expectations evolve rapidly. With the best will in the world, it’s not always possible to predict what users of the future will expect, or what technological advances will come around the corner, so the best advice is to prepare your payments tech stack for change. Create it to be as flexible as possible and not tied into any rigid infrastructures. That way, when the time comes, you’re in a good position to move with the times. 

What technological innovations in payment systems do you see as most beneficial for promoting a circular economy?

FA: Value and sustainability is at the heart of the circular economy, so any innovation that drives this, benefits the sector. So here, we can think about loyalty programmes – incentivising users to make sustainable choices with offers such as cashback, points or discounts. This is possible with an e-wallet infrastructure, like that provided by Mangopay’s solution, which makes it convenient for users to store and reuse their balance on a platform, adding convenience for the user and saving operational costs for the platform. 

How do changes in consumer behaviour impact the strategies of marketplaces in the circular economy?

FA: You can see in the space of just a few years how users’ habits have driven a shift in strategies. Platforms have had to move fast to keep up with changes. Indeed, some have been left behind, while newcomers who cater for the latest user demands have thrived. Away from product marketplaces such as secondhand items, we’ve seen shifts in areas such as travel, hospitality and accommodation driven by evolving user preferences – users are now more willing to share rides, share accommodation bookings and split fees. All requiring a shift in payments strategy. 

Can you share successful case studies where advanced payment solutions have significantly contributed to business growth within the circular economy?

FA: Mangopay’s growth has gone hand-in-hand with so many of our clients. So too has our product development – we are passionate about innovating on behalf of our customers, finding new ways to support their growth. One example is our support for Wallapop has allowed the business to transform from a classified ads platform to adopt a circular economy model based on Mangopay’s e-wallet environment. 

Pay-ins more than doubled in the two years after the partnership began and optimised automated KYC checks also enabled Wallapop to go from onboarding 600 users a year to more than 25,000 a week.

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