Find out essential features, types (web app ideas), business models to erect a P2P marketplace website/app right here!
Marketplace lending is turning heads ever since we experienced pandemics in this century. Lending processes in banks are stricter than ever with the implementation of CPS. Consumers approach peer-to-peer payments (popular as UPI) as an alternative financial credit option. What makes it different? It is a simple application process that facilitates quick decisions and makes instant credit available.
In 2014 in the US, P2P lenders issued billion dollars in loans, and the market expects this industry to grow by $150 billion by 2025. Examples of P2P lenders – Lending Club, Kabbage, and Ondeck took the US mortgage market in their stride. China’s P2P lending sector boomed in 2015, and ever since. P2P lenders operate at quite lower costs and innovate faster.
A peer-to-peer (P2P) marketplace brings together individuals with similar interests and purposes to transact on a common platform. The sellers can share their offerings, in exchange for money or other products or services. Any person can be a consumer or a service provider, or a seller. Online marketplaces perform the exchange of goods and services in lieu of money. It acts as a direct interface for the consumers without needing any third parties. Here P2P stands for the peer to peer transactions.
Procure to Pay or Purchase to Pay or Peer-to-Peer processes enable the integration of the purchasing department with the accounts payable (AP) department. Procure – to – Pay process integrates accounts payable, and purchasing systems, involving four key stages – selecting goods, and services, enforcing compliance and order, reconciliation, and receiving and invoicing and payments. It includes the complete cycle of exchange of goods and services for money that a business requires from a supplier. Procure to Pay process starts with the requisition of goods/services and ends with making a payment.
Source to Pay involves strategic sourcing to ensure that the best vendors negotiate deals amongst themselves.
Web App Ideas: Types of P2P Websites (Illustrative)
Best Peer to peer marketplace platforms allows buyers and sellers to directly interact without the intrusion of any third-party vendors/sellers. P2P can broadly be categorized into four types of web app Ideas:
- Property Rental Marketplace (E.g: HomeAway, Airbnb, Booking.com, Vrvo, BlaBlaCar) – The owner of the P2P Rental marketplace invites all sellers and buyers on his platform and transacts from one place. They charge a fee to make them use his platform.
- Selling Products (E.g: eBay or Etsy) – Vendors list their products on the marketplace by paying a fee.
- Offering Services or Skills (E.g.: Helpware or TaskRabbit) – To quickly find people with the necessary skills.
- Money and Loans (E.g.: Kickstarter and Go Fund Me) – Marketplaces hosting fundraising and investing in loans help businesses to start their business for any purpose.
- Product vs. Service P2P Marketplace – Such marketplaces connect sellers with buyers or connect service providers with clients.
- Horizontal Marketplaces (E.g: Amazon and Aliexpress) – Such marketplaces offer products and services of different niches/categories as a one-stop destination for all needs.
- Vertical Marketplaces (E.g.: HipStamp and Delcampe) – Such marketplaces allow collectors to buy and sell stamps.
- Local vs. Global Marketplace – Local are accessible within a specific region, while global marketplaces are accessible from anywhere in the world, where the internet works.
How to create a P2P marketplace?
Sketching a marketplace platform from the beginning – Such a marketplace website/app will be scalable, and seamlessly integrate with third-party services, tools, and APIs. There is a possibility to add complex – custom functionality to the software and apply the best security measures.
How do money lending apps (P2P Lending Apps) work?
P2P loan payment apps work in the following sequential steps:
- Make a credit enquiry
- Credit rating generates the interest rate and the loan terms
- Mention the need and type of loan
- Review the terms and conditions and accept the loan
- The money is transferred to you in accordance with the P2P platform policy
- Return the money on time every month as late payments might decrease your credit score and increase late payment fees.
Features: What should a P2P Marketplace Website include?
- Listing pages
- Website navigation and search
- Online payments
- Communication tools
- Admin features
- Booking management and availability calendars
- Integrated maps
- Identify verification protocols
Business Models of P2P Marketplaces
Paid Promotions – Here users promote their goods and services by paying a small fee to the marketplace. Paid promotions can be sponsored vendor profiles (Citibank Credit Card at Amazon), featured products (Women’s Tops at Shoppers Stop) and services, and promoted products at checkout (1 Crate Egg for 1/- at Amazon Fresh). Other examples are OLX and Etsy. OLX, and ETSY offer paid promotions.
Advertisements – Third parties get to promote their goods and services via advertisements. It includes – (1) Cost per impression (CPI), (2) Cost per click or Pay – per – click (CPC/PPC), (3) Cost per period (daily, weekly, monthly).
Examples of Inspiring P2P Websites
Examples of P2P Product Marketplaces
- From The People
Challenges and Opportunities: Why P2P lending is increasing and why do you need to be cautious?
So has the P2P sector ever been so cheerful? Not really! It has faced disruption in the global financial services industry and comes with its own overheads. An unchecked growth has resulted in many instances of fraud. Bilking investors, unregulated space, uncomfortable spots, tizzy regulations, unsure market, and low customer confidence are the factors that cause this market to crawl, but then stand up, and stay on track.
On a similar note, China Banking Regulatory Commission (CBRC) has written certain rules to bring this marketplace into practice. Going by the cause, online lenders require to disclose aggregate loan information, and their quarterly performance, and register with local financial authorities to improve transparency. they need to act as information intermediaries and not as credit intermediaries. They are not allowed to leverage outside funding, and with direct lending industries.
Securitization of P2P loans according to the Securities and Exchange Board of India (SEBI) will bring a positive outcome for both borrowers and investors. The presence of a regulated environment will further develop, upcoming (poor) countries, offering alternate credit sources to small businesses, with proper scrutiny and oversight into money lending applications.
Circuital: Do you wish to create a P2P marketplace website of your own?
Recent regulatory actions, strict security, and developments in the P2P lending environment are definitely restricting investors. This is letting web development company in India encourage P2P lending platforms to grow into something as bigger as traditional banking. it is already redefining its operating models in anticipation of an uncertain future!