C2C Payments Part 1 – What are they and which aspects make C2C payments difficult
According to the last report of The Business Research Company, the remittance market size has grown strongly in recent years with the total number of 2023 was 737.05 billion USD and could reach 785.92 billion USD in 2024.
Furthermore, regarding the number of Polaris Market Research, the C2C e-commerce market size is predicted to reach 11,216.30 billion USD in 2032 and this number was 1,670.90 billion USD in 2023.
The above two areas both belong to the field of C2C payments. Next, let's join FinFan in deepening our knowledge about C2C payments and the barriers that make the C2C payment field more difficult to develop.
What are C2C payments?
Different from transactions that involve direct intervention from business to customer (B2C) or business to business (B2B), C2C payments are payments in which both the sender and recipient are customers of the providing services and facilities to connect and complete transactions between them companies.
Types of C2C payments
Remittance to familiar people
Like many previous articles on FinFan channels, we are one of the leading businesses in Vietnam in supporting businesses to transfer money across borders from relatives, friends, to Vietnam for individuals that they know. All those transactions are called remittance to familiar.
In fact, there are many forms to transfer cross-border remittances from the past to the present. However, the fastest, safest, and least expensive way to transfer money is still to transfer money directly from the sender's international payment card to the recipient's bank account or e-wallet.
Read more:
. How to remittance from United State to Vietnam
. How to send money from India to Vietnam
. How to send money from South Korea to Vietnam
C2C payments on marketplaces
Normal marketplace sites
This is the model with the highest volume and number of transactions in the C2C payment segments. Since the COVID19 pandemic, this model has maintained (or even increased) its growth rate when users cannot go to physical facilities of big brands like before.
This model is still assessed by experts as having huge growth potential (about 23.6% Compound Annual Growth Rate (CAGR) over the forecasted timeframe, 2024-2032).
It allows users to pay in many different forms through payment gateways that are separately integrated on each exchange or e-commerce site.
Aution marketplace sites
This model is also growing stronger as more and more auctions are taking place on online platforms. The global online auction market size is anticipated to register growth at a CAGR of 9.0% during the forecast period of 2021-2030.
There are two typical business forms of this model:
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Forward auction: the buyer will pay a higher price and will own the product.
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Reverse auction: the product with a higher preferential deal or promotional voucher will are prioritized for display and purchase by more buyers.
Reverse auctions are often organized by marketplaces as an incentive program for sales shops to increase the sales seller's impressions.
Some typical online auction sites can be named: eBay, eBid, Lazada, etc
Auction is also quite popular in NFT exchanges in the crypto world when pictures, books, collections, etc. are encrypted and posted on exchanges.
With the advantage of decentralization when applying blockchain technology, when posted, NFT products will retain the originality of the product (because there is only 1 encryption key for 1 product). This helps increase the value of the purchased items due to the uniqueness of the product.
P2P lending/P2P Payments
This is the type that brings the most legal trouble and controversy for parties, senders (lenders), receivers (borrowers) and payment intermediaries that open P2P lending exchanges.
However, with the increasingly strong development of fintech models for the unbanked and underbanked world, a number of national governments have had laws to support and develop it, typically In Vietnam.
Read more:
. Fintech serious troubles in Vietnam
. Peer-to-peer lending and fintech serious trouble in Vietnam
So we have reviewed the concept of C2C payment and the types of C2C payment. Next, let's join FinFan in reviewing the factors that make it difficult for businesses in this field.
Which aspects make C2C payments difficult?
High competition
Owing to the rapid advancement of technology coupled with extensive market space, companies within this industry have proliferated and engaged in robust competition with one another.
In the realm of remittance alone, there exist over 150 companies globally esteemed by customers, including industry titans such as Western Union and MoneyGram, a strategic partner of FinFan.
The legality of C2C projects still confronts numerous challenges in comparison to other forms of money transfer.
Due to its direct peer-to-peer nature, the legality of C2C payment support services continues to encounter substantial impediments in certain jurisdiction: “The issue of KYC and AML for both senders and receivers.”
Accurately confirming the identities of both parties is significantly more challenging than verifying the identity from one side only.
Some fraudulent entities exploit vulnerabilities in this regard to perpetrate crimes such as money laundering, bribery, and corruption, thereby posing a threat to society.
The solution to the aforementioned issue lies in companies' vigilant adherence to staying abreast of emerging technological trends and staying informed about the ever-evolving regulations concerning KYC and AML.
Additionally, it is imperative for these companies to maintain updated lists of individuals who are barred from conducting financial transactions or are currently under investigation or asset seizure in the jurisdictions where they operate.
Having trouble with multi-currency issues
The issue of currency conversion in each country is consistently a headache for businesses offering C2C payment services. Customers would find it highly inconvenient if they were subjected to excessively high fees for currency conversion.
To address the aforementioned issue, businesses need to establish a wide-reaching network of partners across various countries to provide optimal support regarding exchange rates for different customers in different countries.
Read more:
. 4 Benefits of a Multi-Currency Account for Your Business and How to Choose the Right Provider
Above are some analyzing from FinFan about C2C payments. Stay updated with more information related to the world of fintech, payment, digital assets, and remittance on FinFan's official pages.
About FinFan
FinFan is a cross-border embedded financial services company that focuses on mass disbursement, fund collection, card processing, IBAN, and digital APMs solutions, which can provide valuable input and integration on and for the same. FinFan already integrated with almost the world's well-known MTOs, PSPs, switch and core fintech platforms as Money Gram, Thunes, Qiwi, Remitly, World Remit, Bancore, PaySend, Terrapay, Ria Money Transfer (Euronet), Dlocal, Ripple, TripleA, FoMo Pay, Wings, etc. For more information, please contact us through:
🌐https://finfan.io
📞(+84) 2866 85 3317
✉ support@finfan.vn
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Dr. Tuyen Nguyen
Money Beyond Borders
