One of the biggest issues with online marketplaces is that buyers and sellers rarely know or trust one another, which often leads to disputes between the two parties. PromisePay aims to fix this issue by providing marketplaces with a payment platform to manage the entire transaction.
The company just announced that it has raised an additional $2 million from strategic investors like Mark Harbottle (co-founder of popular design marketplace 99designs), and Cultivation Capital (led by Jim McKelvey, co-founder of Square).
PromisePay’s solution allows marketplaces to ditch an in-house payment solution, essentially outsourcing the entire process. Marketplaces can easily integrate features like dispute resolution, escrow, and advanced fraud detection.
These are all features that would traditionally require a large IT investment, as well as a dedicated customer service team to handle payment disputes. PromisePay believes that, by outsourcing the payment process, its service can save marketplaces a sizable amount of money, while also improving and and simplifying the customer service experience.
While the company hasn’t announced all of its current clients, two big online marketplaces currently utilizing the PromisePay platform are Flippa and Jobstream.
Originally founded in Australia, PromisePay migrated to St. Louis to participate in SixThirty, a FinTech accelerator located in the city. While the company moved back to Australia after the program ended, some of this new funding will be used to open an office location in St. Louis, and expand the teams at its existing offices in Melbourne and San Francisco.
Reinventure, a VC fund backed by Westpac (one of the largest banks in Australia with over $770 billion in assets) is also participating in the round.