With a quarter of UK adults now using online marketplaces, Zeeshan Feroz, head of marketplace sales at Skrill, tells TechWeekEurope that the fintech industry needs to become part of a collaborative effort to make Britain the global centre for the sharing economy
Airbnb, Hailo and Uber have all become well-known brands by connecting people rather than by selling goods and services themselves. Their success means that there are now many more entrepreneurs building businesses that connect buyers and sellers. From 3D-printing to crafts, property, antiques and car rentals, new online businesses are regularly cropping up to enable people to get the most from their assets, or get the best deal.
The sharing economy, as it has become known, offers huge economic potential to the UK with current global revenues of approximately £9 billion predicted to reach £230 billion per year by 2025. This new, evolving business model is opening doors to those quick enough to seize the opportunity, so it is encouraging that the UK government is striving for Britain to compete with San Francisco as the home of these young tech start-ups. As part of an independent review into how the UK can become the global centre for the sharing economy, the government is exploring some of the major hurdles including insurance, regulation and digital trust.
One of the biggest challenges for digital entrepreneurs that will need to be addressed, with no proven tried and tested framework in place, is managing how money changes hands between buyers and sellers. By default, a business accepting money on behalf of someone else becomes a financial services company and – if marketplaces allow themselves to go down this route – they will be burdened with the cost and complexity of remaining compliant in doing so. The reality is that growing companies want to concentrate on running their business, knowing their payments are in safe hands.
This is where the financial technology sector needs to step up their game and I have no doubt the industry will rise to the challenge. British fintech companies must focus on the need for marketplaces to not only accept money, but also to pay out. By facilitating peer-to-peer transactions, without the marketplace being in the flow of fund, they will encourage further fintech investment in the UK, while also playing a huge role in stimulating growth and extending global reach for businesses at the heart of the sharing economy.
We should applaud entrepreneurs setting up online marketplaces during this exciting time and must pull together to ensure the essential payment systems are in place. By doing so we will not only support a growing stream of entrepreneurialism but also add new capabilities and financial models that could underpin future economic growth.
Zeeshan Feroz is head of marketplace sales at Skrill
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