As you might have seen, the second your eyes opened this morning (I’m assuming like the rest of the population that your phone is already in your hands when this happens, if for no other reason than shutting off your alarm), Facebook has just today launched its own peer-to-peer, ecommerce marketplace—in true Facebook fashion, simply called Marketplace.
Some people are already calling this new offering the “Craigslist killer,” and as Marketplace seems to be run exactly how you’d imagine Facebook would run Craigslist, that combination could actually turn out to be deadly.
Marketplace appears as a new tab on the Facebook app—it will evidently appear on the bottom row of icons for users of the app in the U.S., U.K., Australia and New Zealand, where the Messenger icon currently resides—and tapping the icon will send the user to a home page filled with items “algorithmically generated” to appeal specifically to that user.
Users will also be able to message sellers or buyers through Messenger, which is integrated with the new offering. Evidently, this is also how buyers will pay and how sellers will receive their payment: rather than Facebook facilitating a method of payment, each buyer or seller on the platform will decide on one in each individual interaction.
This is actually, according to people familiar with the field, not the worst way to operate a marketplace—it is, after all, kind of how Craigslist works.
“While the buyer can use the existing Messenger P2P money send tools for payments, it seems Facebook wanted to steer clear of forcing that payment method on the users,” says Levvel Payments Practice Lead Scott Harkey of the choice. “All in all, it seems like a much less risky way for Facebook to enter the marketplace arena. Payment would have just complicated it for them.”
Harkey added that this way, Facebook does not have to guarantee or ensure delivery of the items sold, which will allow them a certain degree of flexibility other marketplaces may not be able to offer. Sellers will also be able to ensure they get paid in the method that works best for them, an undeniable benefit.
However, those of you familiar with how Craigslist works may already be narrowing your eyes—because the biggest problem with that marketplace isn’t sellers getting their money but rather buyers getting their goods.
People are scammed on Craigslist on a daily, if not hourly basis, because the way the marketplace is set up often means that buyers know next to nothing about the seller—and thus is born fraud.
According to Harkey, however, this isn’t really a problem users of Marketplace are going to have—for one thing, buyers and sellers message each other through Facebook Messenger to arrange the sale and the delivery (which is also not facilitated by Facebook but instead by individual sellers on the platform), which means people are communicating from their Facebook accounts.
While it is possible to set up a fake Facebook account—boy, is it ever—those are somewhat easier to spot than fraudulent Craigslist sellers, since a person doesn’t just have to fake a singular sales account but rather years of consistent usage.
“In theory, knowing some Facebook personal data on someone lowers the risk of them scamming you,” says Harkey. “It could be in the future that [Facebook] adds a sort of seller rating, but I don’t think its needed for now.”
Marketplace has still not appeared on my own app, but it should within the week: if the app has already appeared on your phone, let me know if I should move my fall shopping to Facebook.
To learn more about P2P marketplaces and payments, join us at Bank Innovation Israel in Tel Aviv on Nov. 1-3. Register here.Like This Post