Wondering whether the technical side or the business side is harder when building marketplaces?
Well, they are equally difficult.
However, if you’re competent with technology or have a good web development team, the technical side will be much easier.
It will also help to be aware of common technical pitfalls and challenges. At Sloboda Studio we’ve identified the top 4 technical challenges in software development of marketplaces that founders may face:
#1: Multiple user roles
There are three common user roles in marketplaces: customers, suppliers and administrators. Customers and suppliers affect the construction of the marketplace in particular, whereas administrators can be found on almost any project. Marketplace development begins with a clear definition of user roles, their permissions and access level, and ways to interact with each other.
Challenge: Different interfaces
The difficulty here is to create three different interfaces that work perfectly on the same platform but can function differently according to the role of its user.
User roles should have personalized interfaces, and tools for interacting with the platform, registration forms, personal accounts and, most importantly, different permissions. Each query must either be allowed access to only one of the user types or return different results.
#2: Marketplace security
While building an online marketplace, you need to make sure you’ve eliminated all the gaps and security issues, starting with GDPR compliance and ending with data leakage and hacking proofing. This can be accomplished by following the best practices of development.
Data privacy and identity verification are the top priorities for marketplace security. The security issue has especially intensified after the introduction of GDPR.
Challenge: Data Privacy
Data should be collected with the user’s consent; otherwise, you’ll be in violation of data protection regulations. There is no data privacy without data security.
To protect against hacking, Sloboda Studio uses the latest versions of all user libraries to avoid possible security breaches. You can also use Github or Snyk to prevent any vulnerabilities in your marketplace platform.
Challenge: Identity verification
Verifying a user’s identity is a big part of marketplace security. One common way to verify identity is to ask for a passport, driver’s license or other types of ID.
In addition to asking for ID, your marketplace can also request phone number verification.
The authentication process comes after a user’s identity has been validated. Unfortunately, traditional methods of online authentication, such as the use of simple passwords, don’t work now since many frauds have appeared in the last several years.
There are many options available for secure authentication:
The system may authenticate users with a special token generated on the basis of his/her password during login. The passwords themselves are not stored in the database and are encrypted with special algorithms. The front end sends the user’s token to the back end, and the token is validated.
The authentication process can also be simplified by signing up using a social network login, for instance, by using and connecting a Facebook account.
You may also wish to use two-factor authentication, for instance, a one-time password or code that is sent to the user via email or SMS. This method drastically improves security.
You can also use a variety of solutions like OAuth and OpenID. If your app features an API, you can use JWT tokens. The advantage here is that JSON Web Tokens can store additional useful information about users, resulting in higher performance. In the case of cookies, it is sometimes necessary to make requests for more information. With JWT, this information can be transmitted in the token itself.
Every marketplace has its own website monetization system. There are a few available online payment solutions that can be implemented. However, you need to think of all possible scenarios in order to avoid payment failures.
Challenge: Payment method
Having the right payment method is key to building to trust and encourage transactions through your platform. It’s important to find a payment method that works smoohtly both for your business and for your users. (sellers and buyers alike)
Using payment gateways like Stripe or Braintree as a payment solution would be a great choice for service marketplaces. Stripe has a powerful API that is integrated directly into your marketplace. The most important advantage of this payment integration is its transparency and stability.
#4 Multiple time zones
Challenge: Different time zones
It is no secret that when you use a global rather than a local marketplace, there is a good chance that your supplier and customer will have different time zones. Say you want to book an interpreter for your meeting. Which time zone are you going to choose?
In order to avoid giving your customers a headache, and to make life easier for everyone, you need to have a universal time zone. We save user time zones in IANA format, which is the time zone database (a.k.a. TZ or Olson database). It’s a universal database of information on global time zones used with computer programs and operating systems. For convenience, our team of developers keep time in UTC and then convert it to the user’s time zone.
Challenge: Day-light saving time
Another difficulty can be a recurrent order or service that is repeated at a previously scheduled time. Let’s say a customer sets an appointment for a cleaning service, by the same company, on Thursdays at 9 a.m. During daylight savings time, the customer’s service time changes.
The solution here is to create a special service that verifies whether the current time is in the same period (i.e. daylight savings time) and whether or not the time has changed for that period, then adjusts it according to the desired time.
To sum it all up, there are a number of technical challenges facing marketplace owners, including security, payments, time zones, price adaptability, user diversity, and the necessity for a user-friendly interface.
Top recommendations for founders:
- Start by creating three different user roles, with individual registration forms and separate accounts.
- In order to protect your marketplace, use the latest version of libraries and always double-check authentication.
- Think of all possible scenarios in order to avoid payment failures and use Stripe or Braintree to give both sides a seamless payment experience.
- If you have a global marketplace, ensure that your suppliers and customers have the same time zone and don’t forget about time changes, such as daylight savings time.
- Don’t forget that your customers are people, and as much as you want, the platform can’t eliminate the human factor of the marketplace. So make sure to think through each case when you need to notify others about possible issues or delays. Notifications should be sent not only to service providers but also to customers.
Pavel Obod, Founder of Sloboda Studio, Top Ruby on Rails company in the world according to Clutch. Sloboda Studio has been providing high-end web development services for almost 10 years. Pavel is also a Payoneer’s ambassador in Ukraine.