*​This post was originally published in Forbes on March 16, 2015.*

It’s hard for many of us to imagine a time when buying goods on Amazon, Zappos, or even J.Crew online wasn’t as natural as tying our shoes.

Though the history of e-commerce is mostly a success story, electronic retailing firms faced enormous challenges early on to build consumer trust. People forget now how much shoppers in the ‘90s worried about inputting credit card information online and even wondered if the product would be delivered at all.

While books, CDs, and DVDs took off, most early fashion and footwear e-commerce sites floundered. Retailers struggled to diversify beyond commodity goods as consumers, accustomed to brick-and-mortar stores, were hesitant to buy items they couldn’t try on — what if something didn’t fit?

Amazon — which set out in 1995 to be an online marketplace for a variety of products — had to win wary customers to their, at the time, experimental online model by consistently delivering on their brand promise. It was only after a shopper had bought books or electronics multiple times that they might venture to more “complex” products, such as dresses or pants. Simply put, the e-commerce industry had to prove its reliability and performance over many years.

Now, with online sales expected to reach $1.471 trillion worldwide this year, it is hard to remember a time before online retail sales outpaced brick-and-mortar consistently quarter after quarter.

The Rise of Online Investment Marketplaces

In many ways, the online investment space resembles the early days of e-commerce.

While 20 years of broad Internet use has created a society comfortable with online shopping, the world of online direct investing is still a relatively new one, and one heavily dependent on consumer trust.

Similar to online shopping’s initial hurdles, investors want to see investment crowdfunding prove out and yield returns with small denominations before moving significant sums of money. Nobody is going to take our word for it. Like e-commerce, investors want to “try on” the new model first, or check out the location and condition of the building in person.

But, just as consumers slowly grew comfortable with buying fashion, luxury, furniture and even cars online, direct investing online will soon become the dominant channel for money management. Already it’s reported that 71% of investors use the Internet for financial-related purposes.

In particular, we are starting to see the explosion of marketplace or peer-to-peer lending (P2P): financing that replaces traditional bank loans with direct “peer” loans, which can be more affordable, faster and simpler to secure. A recent Forbes piece claims that getting a loan through a traditional bank can take 25 hours of paperwork, while the same process online can be finished in only a few hours.

This was fueled in part by regulatory practices put into place by the federal government as a result of the failure of many banks. Institutions needed to have more cash on hand in case of another deluge of failed loans. In order to have this capital available, banks substantially scaled back their lending practices.

As a result, several firms offering smaller loans emerged to fill the gap that these traditional institutions left behind. The most well-known P2P platform is Lending Club, which recently filed for a +$6 billion IPO.

What’s Next?

All of this is to say that there is ample demand for the crowdfunding of investments, which is a great opportunity for businesses.

Just a few years ago, real estate, small business, and consumer lending were slow-moving and largely closed industries. But today, many say that the opposite is true. Thanks to the advent of marketplace lending, capital can flow quickly, seamlessly, and inexpensively between investors and capital-raisers.

And, as more and more entrepreneurs jump at the opportunity, an $870 billion-dollar industry is well on its way to being fully disrupted.

Though investors still have questions and even concerns about the industry — like the evolution that took place in the retail industry close to 20 years ago — investment crowdfunding may start small but will eventually become the dominant alternative to Wall Street.

Image Source: the_ewan, Flickr