The Platform Business Navigator

Transaction platforms

The essence of a transaction platform business model

In essence, transaction platforms connect sellers (supply) and buyers (demand) of products and services. Unlike traditional e-commerce companies that buy and sell products, transaction platforms act solely as intermediaries, thereby connecting the different sides of a market to facilitate a transaction. Platforms can unlock value if market participants want to interact with each other, but a lack of trust and high transaction costs, such as search or opportunity costs, hinder the exchange. Platforms can often create the necessary trust and significantly reduce the mentioned transaction costs. The unit of value being exchanged between the market sides can vary widely, ...