Marketplace risk

Risks include fake or non-delivered products, counterfeit goods, sellers using stolen identities, buyer fraud via chargebacks, and non-compliance with regional laws like the INFORM Consumers Act or GDPR. Platforms can also face regulatory action for failing to verify sellers or for hosting harmful or misleading content.

Businesses mitigate risk through KYS (Know Your Seller) checks, transaction monitoring, dispute resolution systems, and automated fraud detection. They also use onboarding workflows, blacklist databases, and sanctions screenings to verify sellers before they go live. Education and support channels for sellers and buyers further reduce accidental risk exposure.

Scalability and accuracy are major hurdles. With millions of sellers and transactions, platforms must automate risk detection without over-flagging legitimate activity. Adapting to global regulatory changes and fraud tactics is also difficult, especially for marketplaces operating in multiple jurisdictions.