By: Mariah Young,

Maybe we all learned a little something from Amazon and Ebay or maybe the internet has inspired a new era of shopping, but there’s no doubt that the marketplace economy is booming. Large, vertical marketplaces are sprouting up and proving wildly successful—consider that fact that Airbnb has a $25 billion valuation and Uber’s achieved $8 billion in VC funding. Even Sears used the online marketplace model to add to its fading brand and bottom line.

Whether or not consumers realize it, they’re trending toward the marketplace economy and loving it. That’s not to say the “storefront” style of e-commerce and brick-and-mortar stores are failing—we’ve just found additional, improved means of connecting buyers and sellers. So efficient, in fact, we’re seeing incredibly niché marketplaces sprout up to serve specialized interests and needs of a breadth of consumers.

Building and Improving Marketplace Payments

Our focus here at Dwolla is not so much about the best marketplace ideas or creating impeccable storefronts. We’re much more underground than that. We want these booming marketplaces to run as efficiently as possible from a payments perspective. We want to promote speedy, secure payments within the United States. The way we see it, managing the payments within a marketplace fall into two flows: paying in and paying out.

Pay-in: Occurs when someone wishing to buy something within a marketplace pays for that service, whether they’re buying a unique hand-crafted item or paying for someone to organize their closet. This is how customers pay the marketplace.

Payout: Occurs when the facilitator/administrator of the marketplace disburses payments to those selling within their marketplace. Those who created goods or delivered service receive their payment from the marketplace.

While you can attempt to treat these two payments flows an identical (or even similar), it’s simply not the case.

The Difference between pay-ins and payouts

First, let’s talk about the needs from a pay-in perspective. As a customer, the best way to get me to purchase is to make it easy to do. There are countless numbers of articles to inform you how to make your checkout as easy and convenient as possible—here’s a favorite from Forbes.

From a payments perspective, you want to meet your customer where they’re at. This means you should accept credit cards and make purchase a speedy entry. Sure, credit cards have high fees and can be pretty frustrating, but the use of those plastic cards is so ingrained in our minds that it’s the best way to pay. So for pay-ins, offer an easy-to-use credit card processor. Here’s a good breakdown of the best processors, based on your priorities.

Now, on the other end of the equation we have marketplace payouts. Those receiving payouts from your platform have widely different needs as compared to those paying in—and you have different goals in supporting this audience. As a marketplace, you need to deliver hundreds to thousands of payouts each day, in a way that doesn’t disrupt the flow of business operations.

Those who you payout to will expect efficient, convenient delivery. The best way to pay out is via ACH transfer—directly to bank accounts of those receiving the payouts.

Since you’re not writing and mailing heaps of paper checks, it’s important for your payouts solution to integrate into your platform’s technology. This means you’ll want an easy way to collect and manage the information for your recipients; in turn, whoever you choose to integrate as your payouts provider should accommodate that.

Your marketplace payouts provider should enable you to run more efficiently, not add more processes and moving pieces to manage.

Dwolla for Marketplace Payouts

Dwolla is ideal for marketplace payouts for a few reasons:

  1. Collect the account and routing number of a user
  2. Integrate payouts in a timely, efficient fashion
  3. Streamline processes to deliver payments
  4. Enjoy a fixed or variable monthly cost (with no per transaction fee)

First, as part of the customer’s profile, with just an account and routing number, you can send funds via the ACH network directly to bank accounts of those on your marketplace.

“Dwolla White Label is essential for us to re-open and attract new conversations with larger clients who required a more seamless onboarding experience. With only three endpoints and a webhooks integration, was able to build a lightweight ACH solution in 14 days that allowed us to control the experience for our merchants end to end.”

Mike McEwan, CEO of

Second, as you grow, you’ll want a sophisticated solution that scales nicely alongside your business. Add reliability and automation by using API-based triggers to queue up payouts information rather than manually managing payment details.

This automated process helped one Dwolla Partner decrease time spent on manual accounts payable tasks by 50%, drastically reduce reconciliation errors, and cut transaction times from 10 business days to 1-2 business

Finally, with Dwolla’s API powering your marketplace payouts, you’ll be able to improve your customer experience. For example, a high-end sneaker marketplace decreased cashout related support tickets by 80% and time to resolution by 50%. read-the-goat-sneaker-marketplace-case-study

As the cherry on top, Dwolla doesn’t charge a per transaction fee but rather a monthly rate for easy accounting—you won’t get punished for growing your transaction volume. To get a better understanding about how Dwolla can help with your marketplace payments, reach out to an integration specialist below.

Get started with your own ACH integration

We'll help you design your ideal payments experience.


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Financial institutions play an important role in the Dwolla network.

Dwolla, Inc. is an agent of Veridian Credit Union and Compass Bank and all funds associated with your account in the Dwolla network are held in pooled accounts at Veridian Credit Union and Compass Bank. These funds are not eligible for individual insurance, including FDIC insurance and may not be eligible for share insurance by the National Credit Union Share Insurance Fund. Dwolla, Inc. is the operator of a software platform that communicates user instructions for funds transfers to Veridian Credit Union and Compass Bank.