What Are Marketplace Payments?
Marketplace payments offer a secure and reliable way for your business to process online payments and manage transactions made on your platform, marketplace or app.
A traditional payment solution facilitates transactions between a buyer and a seller. In a marketplace, however, there are typically three or more parties involved: a buyer, a seller, and the marketplace itself.
This makes marketplace payments a little more complex than traditional payment solutions, as they need to handle transactions including multiple parties.
A payment system that is specifically designed for marketplaces typically provides split payments, which means that the payout is split between the seller and the platform, app or marketplace.
What is a Good Payment Solution for Platforms and Marketplaces?
Finding a good payment solution for your platform or marketplace should be a priority, as it can be a critical factor in the growth and success of your business.
But what makes a “good solution”? Let’s have a look at a few of the advantages a good split payout solution should provide:
Seamless Transaction Experience
Seamless transactions improve the customer experience. When transactions are easy and efficient, buyers are more likely to complete their purchases, leading to higher conversion rates.
Increased Revenue Potential
Low transaction fees and optimized payment processing times can contribute to increasing the revenue for your platform. A good payment solution can also provide additional revenue streams.
Fraud Prevention
Secure payments protect your customers’ sensitive information, build trust between buyers and sellers, and ensure the financial health of your marketplace, platform or app. They are in other words essential for creating a trustworthy and efficient digital marketplace.
Automatic Split Payouts to Sellers
In a marketplace, customers can purchase products or services from multiple vendors in a single transaction. An automated split payout method is essential to ensure that the sellers get their share from the transaction, as well as your platform or marketplace getting its commission.
Compliance
Payment solutions help platforms, marketplaces and apps comply with regulations such as PCI DSS (Payment Card Industry Data Security Standard), and can help protect the platform from legal and financial penalties.
How to Choose the Best Payment Solution for Your Platform, Marketplace or App?
There are a number of marketplace payment providers available, and deciding which one is the best for your business can be tricky.
Firstly you need to determine your own requirements and wishes for a payment solution. Then you should research payment solutions and read reviews.
Below are some key factors you should consider when choosing a payment system for your platform, marketplace or app.
Features
What features in a payment solution are important to your business?
Look for marketplace payment solutions that offer the features you need, such as several payment methods, fraud detection, dispute resolution og recurring payments.
Flexibility
How flexible is the payment solution?
A flexible payment solution can provide you with the ability to customize and optimize your payment process to meet your specific needs.
Split Payments
How should vendor payouts be handled?
Being able to automatically split payouts between sellers can save you a lot of time, and make the payment process way more efficient.
Secure Payments
Will you get a secure payment system?
Look for a payment solution that is KYC compliant as well as one that offers strong security measures and will protect your customers’ sensitive information.
Transparent Fees
How much does the marketplace payment solution cost?
Every payment solution comes with fees, so if this is an important factor to you, make sure to find a provider with competitive rates, transparent pricing and no hidden fees.
Customer Support
What level of customer support do you acquire?
Choose a payment provider that offers excellent customer support and can help you resolve any issues that may arise quickly.
Scalability
Can the payment system grow with your business?
Pick a provider that can handle the increase in transactions as your business grows. You should also look for a solution with scalable pricing which enables your business to be competitive in the market.
Integration
How does the payment system integrate with your platform, app or marketplace?
Find a solution that integrates seamlessly, and that is easy to set up and configure.
What is the Best Payment Method for Marketplaces?
There are a myriad of payment methods available. Instead of choosing just one, you should include several payment methods in your checkout, letting your customers decide how they want to pay.
Visa and MasterCard
Visa and MasterCard are two of the largest card schemes in the world, letting your customers pay with debit and credit cards.
Vipps
Vipps is the most popular mobile payment app in Norway. The app allows users to make instant money transfers, pay bills and make purchases both online and in-store using their smartphones.
Swish
Swish is the biggest mobile payment app in Sweden. It enables users to make instant money transfers as well as payments in stores and online.
MobilePay
MobilePay is the most popular mobile payment alternative in Denmark and Finland with more than 5 million users. It is a digital wallet that lets users add a Visa and MasterCard.
Apple Pay
Apple Pay is a mobile payment service by Apple that allows users to make payment in apps and in the Safari browser.
Google Pay
Google Pay is a global mobile payment service that can be used for in-app, online and in-person contactless purchases on mobile devices.
Walley
Walley is one of the leading “Buy Now Pay Later” methods in the Nordic region.
Klarna
Klarna is a global and leading payment platform giving your customers flexibility to choose between paying the full amount today (Pay now), buy now, pay later, or splitting the purchase into smaller installments (Pay over time).
Grow Your Business With the Right Payment Solution
Choosing the right payment solution is critical to the success of any digital platform or marketplace.
However challenging it might be to choose the right provider – by investing the time to evaluate different options, you can set your business up for long-term success and growth.