Ep: 25 How G2A Leads Innovation in Digital Marketplaces

Speaker A: Hi everybody. Uh, welcome to the finteview. I'm here today with Dorota Robel. Is that right?

Speaker B: Correct.

Speaker A: Perfect. Thank you very much um, for training me beforehand. Um, she is the chief R and D officer of g2a.com which is the world's largest and most trusted marketplace for digital assets. Dorota, thank you very much for joining us.

Speaker B: Thank you very much. I'm glad to be here today.

Speaker A: Um, maybe you could start just giving us a very brief overview of G2A, what it does, um, where it came from and plans for the Future. Sure.

Speaker B: So G2A is the world's largest and most trusted marketplace for digital entertainment where more than uh, 30 million people from uh, 180 countries have purchased over 100 million items. Only in 2023 we had over 250 million visits on G2A.com and our clients can choose from more than 75,000 digital offerings including games, DLCs in game items as uh, well as uh, non gaming items such as gift cards, subscriptions, software or elearning sold by sellers from all over the world.

Speaker A: So it's like Amazon, um, but for digital goods. Basically the listeners kind of mental models,

Speaker B: um we can say that the business model is to say that marketplace similar to Amazon or ebay. However as a brand g2a.com opens the gate to adventure in digital entertainment. And by using brand archetypes methodology I can explain that as uh, the explorer we inspire and help to discover what's out there in the digital entertainment. So we recommend what's worth paying attention to or ah, worth spending time on once. Digital entertainment is huge these days and audiences very um, complex and diverse. And on the other hand as uh, the caregiver we create safe environment for shopping and enchant entire customer journey journey ensuring the process is easy and friendly. So we are let's say on the mission to democratize digital entertainment and make it accessible for everyone despite age, gender, location or status as well as empower them to grow and expand their potential in the digital world.

Speaker A: Thank you. Um, it would be great to kind of understand your role at G2A and um, well how R and D basically fits into the business strategy.

Speaker B: Yeah, sure. So uh, basically when I graduated in international relations from the University of Rome, I was looking for a job where I could use my knowledge of languages. English, Italian and Polish. I was a gamer, but more a casual type than a regular gamer. And my recruiter told me about G2A. Then I decided to return to Poland. And back then G2A was an online shop for gamers. And I started as a business development specialist and within a year I became responsible for more and more markets. And in 2014 because you know, website shop has got some limitations, G2A changed its business model into a marketplace. Two sided marketplace where buyers and sellers, they connect and transact with each other. And it was a uh, time when I was promoted to the head of the marketplace marketplace because many of my ideas had a positive impact on our business and many of my, let's say observations, suggestions turned into an effective business solution. So today G2A as I said before, is the largest marketplace for digital entertainment. I am responsible for the entire platform and R and D area as a chief R and D officer.

Speaker A: Um, it was very interesting kind of the, kind of the high level view that you said. It's basically bringing merchants and customers together and allowing them to transact. Uh, we are a fintech focused um, podcast, um, and we'll talk about kind of finance, um, related things. But um, it sounds as though financial services are at the heart of what G2A does. Would that be right?

Speaker B: Indeed.

Speaker A: Um, so it would be great to kind of understand um, and I guess this is a multi layered question kind of where what sort of transactions are being facilitated across the marketplace, um, from customer collection right to the merchant being paid. It would be really, really great to kind of get uh, an understanding about how it fits into the marketplace place operations.

Speaker B: Sure. So let's start with the customer review. So how G2A actually acquires payments. So we are actually constantly expanding our payments offerings to better serve our customers and we are excited to continue growing and evolving alongside the changing needs of the payments industry. Of course we as GT way are researching the regions uh, we are operating in in order to pinpoint the most popular payment providers and get into talks with them in order to secure availability. We're also looking for the newest technological solution on the payment market and monitor them in order to see if they will gain traction and implement them soon after. So uh, right now we have got uh, around 200 payment options available for our customers. Uh, I can imagine that this is like a wide range of payment methods, but I will just mention a few like including popular global options such as cards of course, PayPal and Google Apple Pay. Uh, but I would also put a big highlight on numerous local methods like Venmo, Bleak, Ideal Pix or so forth. And with support for more than 400 banking channels, we offer one of the most comprehensive payment platforms available ensuring of course that G2A users can use the methods that uh, work best for them. And we decided to offer such an um, extensive range uh, due to the need and expectations of our clients. If you are from the United States, life is much easier when it comes to payments. Of course you have PayPal or credit card available to use but if you are from different regions like Brazil you need Boleto, or if you have clients in India you need paytm and so on. Every country has its favorite payment methods and what we are trying, we are trying to help them all in order to give that choice to our clients.

Speaker A: Presumably um, if you're going to be the largest and most trusted then um, a customer has to be able to pay uh, for the goods that they want. Um, how often um, like presumably you can cover off almost all types of payments now. Right? Is there anything that's missing from that list that you would want to kind of add in the near future or um, uh, is it like are you seeing any trends in terms of kind of move towards local payments methods or anything like that?

Speaker B: I think that Internet payments are in constant state of evolving. Uh, you know first was checks, then credit cards, wire transfers, etc. Some countries are still paying uh, in the old fashioned way, like I would call let's say wire transfers in Italy as an example. Uh, but customers need uh, easier payment solution and they force PSPs to create solutions that draw them in. So currently the trend is to create local payment options that can offer extra benefits to customers. Not just payment for the shopping but also paying bills, transferring funds between friends and even operating ATMs. Some PSPs even have their own loyalty programs or offer attractive cashbacks. So we are looking at all those trends and trying to um, match customers needs with what PSPs can offer as additional value to our clients, to our customers.

Speaker A: What about digital currencies? Um, as well as, because they're not widely um, accepted as yet but um, presumably you would see sort of certain customers wanting to potentially pay in those um, kind of alternative currencies let's say.

Speaker B: Yeah, I think that they are also uh, very important and they are getting on some trends. Uh, however it's not still predominating trend within our landscape. Uh, but we see that they are popular in different regions so we are trying to adjust to that, to that situation. And this is also related to our customer database. Ah because our customers, they are young, they are early adopters so they like to try new things and then deciding what uh, is working the best for them.

Speaker A: So that's from the customer perspective. What about from the Merchant perspective then um, what are the key trends that are kind of driving um, how your merchants uh, interact with the platform.

Speaker B: Sure. So for the merchant view I think that it is important to mention that ah, uh, we have combined the needs of customers and merchants at the same time as StreetAway is a two sided marketplace and those solutions that then have to work for both buyers and sellers. And our sellers uh, are businesses and they have to undergo a strict verification process where we are analyzing manufacturers before they can start selling. But once they are on the platform and they uh, they sell, they uh, they stock, uh, we make sure that the payout methods are flexible in range and safe. So we provide a uh, safe platform for sellers to use. Connecting huge global reach with a, with variety of payment options, making sure that the platform is kept on the highest level possible. And the sellers can make use of this uh, let's say to conduct the businesses of course um, if you want to withdraw funds you need to have them in your available balance. And if you are a seller it takes between 7 and 14 days for your earnings on M sale to become unlocked with the actual time depending on your seller Supreme Rank. So seller Supreme Rank is uh, typical uh, gamification based dedicated program rewarding sellers for great customer service and high sales level on the marketplace. So sellers earn ranks by having many positive completed transactions and comments, responding to any negative reviews and offering a good treatment to the customers. And higher ranks are connected with lower fees. This is important. And faster payout times. That is why I think uh, it's important to highlight that because this is not new, that they aim to have the best cash flow possible. Right. Every marketplace has got the same challenge. Uh, so our sellers need to complete verification procedure or meet other requirements specific to a selected withdrawal method. But once it is done done then they can pay out money in my opinion quite faster than on the other platforms. And merchants rely on the payment flow and need to be really fluid to operate. So we put a lot of attention on that.

Speaker A: So it's kind of uh, from the customer side you're optimizing for conversion rates and speed basically and convenience for the customer. But the same is true for the merchant. Right. Because you could have a UK merchant essentially selling in Brazil, accepting a local payment method in Brazil for that payment. Uh, you guys converting that into uh, let's say a faster payment. So that is the merchant in the UK can get its money as fast as possible. Right. So it's kind of a dual optimization that you're constantly having to run to give both Sides of marketplace. The best experience possible.

Speaker B: Yeah, exactly. It's always a balance between security and convenience, PSP cost and success rate etc. Etc. So uh, this is exactly how it

Speaker A: works and it sounds as though. Well I'm presuming that the local payment methods on the merchant side are probably the ones that they prefer as well. You know talking from a UK perspective obviously faster payments are almost instant, um, lower cost than a cross border version of the same thing.

Speaker B: Yeah, in terms of payouts we are uh, having like um, much more limited payment methods than when it comes to pay ins. However still those that are of the, of the seller's choice of the seller's needs. So we are asking them which one they would like to have and we are adding them in order to the preferences. So currently we have got a few payment uh, options for the, for the sellers like Krill Pioneer bug transfers and we are adding another let's say based on the, on the seller's needs. But normally they are using um, the same payment methods. Let's say they are not as difficult in terms of finding needs as customers on the pay inside.

Speaker A: Are there any um, from a merchant side of things, Is there any jurisdictions that um, it's difficult to kind of get access to local payment methods? Are there any challenging markets actually from an incoming and also an outgoing basis?

Speaker B: M Right now I don't have in mind any difficult destination. However I have got quite interesting story. When we were trying to uh, at the beginning of our adventure with games we were trying to you know expand um, into different markets. Once we uh, were able to establish our position in Poland, then we decided to go into European countries and then started to look at different markets like us, China and India with different results. And in the US we did very well. And it's, it's one of our core markets now of course. But in China and India I would say not so much. And I'm not talking here about M business potential but about some um, things in terms of payments that heavily surprise us. So there are a lot of players in China and despite the governmental restrictions on gaming, uh, definitely everybody heard about that, it is still an attractive market. But the problem is that the money earned in China must be spent in China. So we hit a wall when it comes to payouts to sellers because we couldn't maintain the timing and the volume of these payments due to those governmental restrictions in the country. So this is one example in terms of merchant side. But on the other hand uh, in terms of customer view we've got India. And I was surprised that despite buying a digital product which is in the format of code, cash on delivery was still, you know, very popular payment method there. So today is changing a bit towards E wallet, but it was still an interesting experience.

Speaker A: So in that case, uh, the customer was what, posting cash?

Speaker B: Yes.

Speaker A: Okay, good.

Speaker B: Um, and we hid there like 700 transactions. But you know, uh, we, we had to operate in a way that was not natural to us because this was like totally not digital. So you know, that, that's, that was interesting story and that's why I wanted to, to share it today with the audience because I think that sometimes things, even if you are pre, um, when you are expanding into the market still you can be surprised by something.

Speaker A: Presumably, um, the trend over the last couple of years is you know, like a heavy digitization in the places that you know, you said you've highlighted maybe weren't digitized, uh as much. Are you still doing kind of analog payments, um, or is it you know, fully digitized now?

Speaker B: Now, right now we are fully digital. Uh, I think that cards payments were a basis for a long time and even if they were tokenized online in the form of one clicks of recurring payments, it's still big. Part of the audience is paying by cards. And later on I think improved into the form of online wallets, uh, which were ultimately added to our phones. And new payment solutions have to be of course simple, intuitive, connected to what we already know and have like our bank apps with like a new trends. I would say, uh, open biking is something borderless transactions, instant transfers from country A to country B. But uh, still cars are quite relevant. Right. Especially in some regions like Scandinavian countries or us.

Speaker A: Um, I guess uh, we've talked about the uh, kind of the infrastructure you need for customers also for merchants to a degree. Um, it would be interesting to hear from the G2A side because uh, all offering 200 payment methods comes with a certain degree of cost for the marketplace. Right. And from um, on the, on the payout side. So how do you go about optimizing um, channels and costs for the business, um, to make sure that um, what can be quite a big cost overall is kind of actively um, managed over time.

Speaker B: Sure. So why of course, of course it's important to optimize the costs. You have to weigh the benefits it brings against the quality we provide. So it is a continuous analysis between cost and success rate and quality of the services provided. It's also very important for the merchants. Things like transfer times, fees or specific actions have to be clearly presented to them and discussed what is acceptable by them. That's why where we are um, building our dashboards we still uh, conducting many surveys with our merchants in order to have the feedback on our, on our services. Instant bank transfers in the current world they are becoming a reality also for merchants so we can offer them due to open banking or providers we are working with that have such solutions well developed. And uh, the last thing I think balance between security and convenience which we think is not uh, is not right now at really reasonable level. And new solutions are often made for both accepting transactions and paying out funds and by basic operation on such wallets. Both types of operation can happen in pretty much real time at the same time keeping in mind the need for proper security of such payment flows. So this is important and for the merchant side we are also conscious about how, how important the cash flow is for them. We are also offering them cooperation with, with the partners like Ulend that offers fast flexible uh, financing solutions to businesses. And I, I think that this is very helpful for them because they do not need such financing often. But if there is like a four new game launches announced in a given month, we can see that they are more willing to use such options so they can develop their business thanks to it. And we are happy that they are happy.

Speaker A: I'd just like to expand on that last point about the credit to the merchants enabling them to sell more. Is that right? My kind of understanding.

Speaker B: Yeah. It is a cooperation with external partner that is giving such options to our merchants. We are not uh, let's say doing that by ourselves but we are trying to find solutions in terms of financing uh, financing field that they can uh, help them out in terms of cash flow if they, if they need right they can use it or they can not use it. But it is up to them however we can. We have got such options and we are currently looking for similar partners to you know, to add value to our merchants.

Speaker A: Um, and I think you said as well that you constantly kind um of get feedback from the merchants about how to improve. Is there any like you've touched on speed uh, and the trend for faster uh, and faster access to funds, security and compliance as well. You touched on. Is there anything else that um, the merchants kind of are constantly pushing you guys on to.

Speaker B: To do M. I would say that one additional point I would mention in here is that what maybe sets us apart in what we offer to the, to the sellers is that if they are selling uh an item on our platform, ah, uh, we actually get Paid just after. So we are not having any commissions for listings, only for the sales. So it is like a cost per sale model and it's a Win win model because in addition we try to meet, you know, the seller's expectation and try to offer reduced payouts time in the quality of customer service that they are providing to our, to our client and preferably at the highest level. So uh, I would say that additional thing is that Win win model, we treat them as a business partners, ah, and we really care about the experience as well. Because sometimes in marketplace models, you know, everyone is talking only about the customer side. And I would say that merchant side is also very, very important.

Speaker A: Um, maybe you could just touch on the um, kind of calculation that you highlighted earlier about the score that you give um, the merchant in terms of customer service. Is there anything else that goes into that score outside of customer service, like length of time selling on the platform or anything like that?

Speaker B: Yeah, ah, we are looking to the conversation model, how they are treating the customers, how fast they are replying to uh, the questions from the customers. We are also uh, looking at the variety of the products that they are offering, how they are trying to expand the offer, if they are looking for new products that could be of interest of our customers. So many aspects have got an impact in the end of the seller supreme level. Uh, and of course if they are selling a lot, they can expect better commission, uh rates which is from the economic point of view very important to them. So they are trying to be on that level every quarter in order to match those requirements.

Speaker A: I think um, the data that you have on um, each merchant probably puts you in a very interesting position to be able to offer financial services directly to them potentially in the future, uh, rather than third parties. But uh, do you active like the data you have is clearly very valuable as well. Right. So um, how do you um, use that data basically to decide which additional services to offer to your merchants?

Speaker B: This is not on our side. We are only advertising, let's say the financing solutions, uh, to the customers, to the merchants, uh, in that case. But if they want to um, receive uh, like um, additional, additional support, then they have to go undergo the KYC process, uh, in terms of. Yeah, yeah, the lender. So uh, in that case, uh, if they are um, if they are okay, then we, we can add, let's say additional additional information into our dashboard. However, this process is totally on external services. It is not like G2A is offering Ah, financial services to them directly as G2A.

Speaker A: Okay. Um, where um, if we can kind of talk in gaming industry specifics because it's probably one of the, well probably one of the largest um, industries in the world. Does it come with its own, do any specific uh, digital um, entertainment assets come with its own specific challenges?

Speaker B: I think that with the digital assets the challenge is that it is instant delivery. Right. So if anyone is saying that the challenge is one day delivery, I would say that one minute delivery is a challenge as well.

Speaker A: Please tell us why because this is super interesting.

Speaker B: Yeah, uh, because you um, have to have your system prepared in real time for transactions happening in every second. So uh, from the backstage of course, in terms of infrastructure, people, engineers that are working on our system, it's a big machine, big engine. And looking also at ah, the fact that we are G2A1 domain available in 180 countries, you can imagine that it's quite complex, complex situation when you are accessing the same website uh, from different parts of the world. So I would say that this is the challenge and in here we can treat ourselves a bit as a pioneer in terms of digital assets because uh, we are not treating any physical um, products. Only digital assets can be sold on G2Amarketplace. And what is also very important is that our seller, if they are let's say registered on our platform, they can sell worldwide, they can pick the countries where they can do, they would like to do that and then they can start selling which is different than for the other marketplaces where they can, they have to set up accounts in specific countries. So from the kyc you will have like a variety of nations that ah, are doing application to becoming a seller from Saudi Arabia to US to Europe to, to everywhere actually Brazil. And then you have to verify all those documents. And in here we are also cooperating with different partners that are helping us to do that.

Speaker A: Along the same lines it at least in theory sounds slightly easier uh, when I want to return something and it's a digital good rather than a physical good. I wonder if uh, you're about to tell me that it's as equally as challenging uh on the return side as on the delivery side.

Speaker B: Uh, I would say that it's totally different. It's totally different. Right. Because uh, with the digital format uh, you can tell us that uh, I don't like the graphics in the game. Right. Which is not actually that G2A can do something about that. It is more on the developer side. But uh, I would surprise you. I think that we have got less than 1% of refunds oh wow.

Speaker A: Amazing.

Speaker B: Yeah, this is amazing. And it's totally different than with the physical products where you know uh, I think that this um, this KPI is much higher let's say.

Speaker A: Yes.

Speaker B: However we achieved that because we really focused on the customer journey. So our products are really well described. Uh, we treat different regions uh, in different way so those customers, they cannot be lost on the purchase path. And uh, we are also putting a lot of effort and attention on verification of the stock that is available on um, uh G2A com. We have got more than 100 parameters that we are checking before the sellers are start selling. So we really put a lot of uh, a lot of attention on that and we are cooperating only with the qualified merchants. That's why we are only allowing business verified sellers to sell on marketplace and we do not allow individual ones uh to become a seller on G2A because we know that they cannot meet our high requirements in terms of customer service.

Speaker A: Okay, um, just kind of zooming out slightly to the macro level. I'd love to kind of pick your brains about um, your view of the future slightly uh, both from uh, where kind of G2A goes from here and plans for the future but also kind of the future as you see it from a payments perspective as well and whether you have strong feelings about specific trends that you can see across your customer and merchant base.

Speaker B: Sure. Uh, I think that embedded finance is an integral part of many e commerce stores and marketplaces right now. So this is the first trend that I would say that is important. I think that also discount calls used often and regularly in marketing campaigns both digital like Get Ready Us and our in in Spain and also physical ones because we've got partnership in Poland with Dr. Hector with a physical discount code. So we are trying to combine those two words, affiliation programs. I think G2 a goldmine which is an affiliate service that allows ah our users to earn uh money by recommending uh favorite games is something that is trending and will be uh of big importance in the future as well. And of course long term campaign calendar that takes into consideration trade season and upcoming new releases ah that are uh, uh coming this year. And security trends, our comprehensive approach to security actually allowed us to keep the anti fraud rate at the much lower level than the industry average. I think that security will be for everyone the top ah priority for us it was it isn't it always be. And the marketplace um right now is protected by cutting edge AI supported security systems like Senti one, Qualysh or Sonarqube and in the future emphasis put on selected key areas like heightened attention to data privacy and compliance, the integration of AI and machine learning for advanced threat detections. But uh, in combination with the human touch will be something that uh, will be seen as the biggest importance.

Speaker A: I guess um, just touching on kind of AI, not from a security perspective but maybe on a customer support perspective. Is that something that you're seeing in terms of your merchants and being able to offer kind of um, higher levels of customer support, more responsive levels of customer support, using technology to kind of get back to customers in faster methods?

Speaker B: As we are the technology company, uh, we are trying to you know uh, to put the AI wherever it is possible. But we are of the opinion that the hybrid model works best. So not only you know, relying um, exclusively on AI solutions, we have got still part of the departments that are um, looking at helping let's say customers, uh, and merchants to have better experience. So I wouldn't say that we will totally uh, totally base our operations only on technology. Uh because gamers and people who are seeking for digital entertainment, they are about emotions. Right. And AI doesn't feel much emotions. So you know.

Speaker A: Not yet.

Speaker B: Not yet. So that's why we are of the opinion that the hybrid model will work

Speaker A: the best for us I guess as well. I'm just um, kind of thinking out loud slightly here. Marketplaces like G2A because you're so global actually you'll, the localization of all of this stuff becomes really, really important. You'd never be able to you know, have a, let's say a stiff upper lip British chatbot work well in all of the different um, regions potentially to you know um, it's going to be lost in translation somewhat. So, so I'm interested in kind of the localization and how it works for very large global companies like you guys um, over time.

Speaker B: Yeah. So for the translations of course uh, we are using AI solutions and uh, in terms of uh, also some marketing activities or customer support activities as well. Uh, and it's you know, a big cost optimization, right?

Speaker A: Absolutely, absolutely. And just slightly um, talking about kind of the big technology companies. I'm talking about Apple and Google basically and how their kind of wallets are um, growing over time. You said you offer it as a payment method. I'd be really interested to see um, and I don't know if you've got data on this but just how the kind of the, how prevalent usage of Apple Pay and Google Pay is um, on marketplaces like yourselves.

Speaker B: I think that they are very Popular and you know, by saving car details you can leave your home without a wallet with just a phone and still make payments. And I once wondered how much sales of such, you know, physical wallet version with a compartment for cards and coins M might have fallen uh, by since customers learn to pay with their phones. Uh, my grandmother for example still handles cash uh, but none of my peers use such a wallet uh anymore. But the way let's say as it is right now I think that those physical wallets falls out of the ranking of gift for Christmas because of Apple Pay and Google Pay, right. So uh, I think it's very, very popular. Uh, I even observed that between PSPs there is like a fluctuation around popularity. You mentioned UK and in UK I observed on Marketplace that uh, Apple Pay actually replaced PayPal. So uh, between PSPs I think there is like a big competition in terms of customers and how to attire their attention and that's why they are adding additional values ah to their service because they know that they can any longer compete only on um, rates or you know, really old school, old school sales decks.

Speaker A: And do you think because the natural, because of the ability to embed kind of the wallet services into the apps that they're serving on their phones already. Kind of the natural thinking. If you're going to say uh, that that's the future it would be like the PSPs are going to become increasingly irrelevant. I'd love to get your view on whether you still um, see kind of the payments market being quite uh, disparate and fragmented um, or kind of the technology companies increasingly playing a much larger role than they are now.

Speaker B: I would say that from um, my point of view, PSPs that like years back they were trying sell the same with different sales pitches right now they really think about what to offer uh, which is good right? Because for the payments industry such competition between the PSP providers in my opinion is very good. And we observe also new startups, new fintech, uh, solutions that are really well optimized in terms of technology but still lack of operational, let's say um, governance sometimes M however those ideas it's in my opinion worth to watch. And once they are um, trustworthy and big enough you can then implement such providers to your platform because if you are small and medium I think you can get one gateway. But if you are a global business on our scale you have to think about who would you like to invite to process the payments for you.

Speaker A: Yeah, yeah, well there's almost a separate layer uh, that's been um, uh kind of created in the last few years, which is kind of the piece that sits between the PSPS and the customer. Right. When it allows kind of smart routing, um, cost optimization processes as a piece of software to enable kind of much wider networks of payments providers being put together. Presumably you guys have your own version of that, but the players out there will kind of offer that service to much smaller or medium sized players.

Speaker B: We do have our own in house built solution and we have get intelligence routing based on countries, PSP providers, success rate and costs.

Speaker A: Yeah, well, um, these sorts of things being like, I mean this is how Amazon Web Services was created. Right. It's created for a customer and then it's worked so well, you're able to sell it as a separate product basically.

Speaker B: So apparently for every marketplace, payments is really important field.

Speaker A: Exactly, exactly. Um, cool. So um, Dorota, thank you so much for joining us on the Finteview today.

Speaker B: Thank you very much. It was really pleasure to be here today and exchange our G2A stories with the audience and some tips and tricks around um, payments on um, marketplaces.

Speaker A: Thank you so much.

Speaker B: Thank you very much.