VarageSale Takes on Craigslist With Mobile Payment Edge

Craigslist has long been known as what the newspaper classifieds once were, but on a scale larger than any newspaper could handle or even imagine.

For a long time, Craigslist was largely unchallenged, even giving rise to a new kind of crime: Craigslist fraud. Now, there’s a new answer to Craigslist, driven by the power of mobile payments known as VarageSale, and it’s got a couple key advantages over its incumbent competitor.

VarageSale’s mobile payments mechanism—a system of payments built into the app directly—allows users to make payments from the app itself before actually seeing the people making the sale. With that, users no longer need to carry cash to meetings involving potentially dangerous strangers.

Customers can use a payment card to fund the built-in VarageSale wallet, but can also use the proceeds generated by items sold to fund the wallet, thus allowing for the ultimate in budget shopping that accommodates not only cash, but also available space; nothing new is bought until the old stuff is sold.

Better yet, users won’t need to pay fees to use the mobile transaction system; VarageSale’s CEO Carl Mercier notes that the mobile payment system was there to make the app “more compelling”. Without fees, VarageSale actually has to pay transaction fees itself, and that’s likely being considered a promotional expense.

Given that Craigslist continues to operate only online, that’s a big chunk of market that VarageSale could take up with its focus on the mobile market. It’s got some competitors in the field, including OfferUp and Letgo—not to mention Facebook, dipping a toe in the water with its Local Market feature—but it’s still VarageSale that seems to have the only mobile payment edge here.

That could be a very substantial edge in the future; while it’s possible that people wouldn’t make good on the purchases in question, even that works out for the buyer as the next call is to the police. Better yet, there’s minimal risk of Craigslist issues; no cash means there’s no reason to hold up a person coming to make a deal other than to potentially steal a car, and doing that in broad daylight is a huge risk.

The seller is likewise protected as he or she has been paid for the item in advance.

VarageSale may be a real force in the days to come, and it’s going to have a long road ahead of it. Craigslist has the clear name recognition factor on its side and that front-of-mind edge that’s hard to beat. VarageSale’s advantages, however, may be enough to push it over the top…until Craigslist brings in its own in-house mobile payment system.