In case you’ve missed it, the marketplace economy is booming. At this point, there’s more stuff sold on Amazon than could fit in the actual Amazon rainforest and eBay has more users than Russia has citizens. Coupled with the millions of other marketplace websites across the world, it’s safe to say that the internet has changed the way we shop—now and into the future. 

Online marketplaces are websites or applications that connect buyers with sellers, offering a convenience to consumers. Marketplaces act either as brokers, charging providers a commission for their services or as final sellers, adding their own markup to vendor pricing. That’s not to say the “storefront” style of e-commerce and brick-and-mortar stores are failing—the evolution of technology created additional avenues to connect buyers with sellers. Even the most incredibly niché marketplaces sprout up to serve the specialized interests and needs for specific consumers.

Consider the fact that marketplaces like Wish, an e-commerce marketplace that launched in 2010, hit the $2 billion revenue mark in 2018. Sears even used the online marketplace model to add to its brand and bottom line. 

With consumer spending surpassing $14 trillion as of the third quarter of 2019, having a marketplace payment integration that moves money affordably, reliably and securely is crucial to growing an online marketplace. 

Building & Improving Your Marketplace Payment System

Our focus here at Dwolla is to be the ideal marketplace payment platform. We want these booming marketplaces to run as efficiently as possible from a payments perspective with timely, secure payments within the United States. The way we see it, marketplace payments often fall into two flows: paying in and paying out.

A marketplace that specializes in antique movie posters, let’s say, needs to both collect money from buyers and pay out vendors who sell their posters on the marketplace platform. As the business grows, the businesses will have to payout more vendors and collect money from more buyers. In principal, that’s a good thing but with the wrong payments solution, the marketplace may be paying fees or spending undue time on both ends of the transactions. 

While you can attempt to treat these two funds flows as identical (or even similar), they are distinctly different. 


A pay-in occurs when someone who is 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.


A payout occurs when the facilitator or administrator of the marketplace disburses payments to those selling within their marketplace. 


Combining pay-ins and payouts, Dwolla offers a facilitation funds flow for users to transact with each other, helping the marketplace function without taking possession of the funds.  

With this funds flow, marketplaces can elect to charge a facilitation fee for this service, as well as to potentially avoid being considered a money transmitter, a distinction that comes with extra regulations and requirements. 

It’s important to note that Dwolla is also not a money transmitter. 

Important Aspects of a Marketplace Payment Integration 

From a consumer’s perspective, the best way to get someone to purchase something is to make it simple to buy. The ideal marketplace payment integration should create a positive user experience, making it easy for a consumer to interact with your marketplace.

The Nielsen Norman Group measures user experience using five components:

  • Learnability: How easy is it for users to accomplish basic tasks?
  • Efficiency: Once users have the design learned, how quickly can they perform a task?
  • Memorability: When a user returns, how easily can they reestablish proficiency?
  • Errors: How many errors do users make, how severe are these errors and can they recover from making the error?
  • Satisfaction: Is the design pleasant to use?

User experience is a necessary consideration for marketplaces to survive in today’s mobile era of the internet. 

Marketplaces Accepting Credit Cards

Because of how common they are to most consumers, most marketplaces will accept credit cards during the pay-in portion of the transaction. Cards are ubiquitous and convenient for the consumer but they come with high fees for the marketplace. 

On the other side of the transaction are the marketplace payouts. Those receiving payouts from your marketplace have widely different needs as compared to those paying in—and you have different goals in supporting this audience. 

When searching for a marketplace payment system, choose one that can deliver hundreds—or thousands—of payouts each day in a way that doesn’t disrupt daily business operations or come with costly fees to make a payment. 

Marketplace payments are expected to be efficient and convenient. At Dwolla, we believe the best way for marketplaces to pay-in and pay out is via ACH transfer—directly to and from a bank account.

ACH Payments for Marketplaces

Marketplaces offering ACH payments replace the process of writing, mailing and managing heaps of paper checks. Electronic payments mean having an easy way to collect and manage the information for your recipients (whoever you choose to integrate as your payouts provider should accommodate ACH payments). 

And, it can mean a significant cost savings over other forms of payment. Use our payments calculator presented by Nacha, the governing body of the ACH Network, to see just how much your business could save by switching to ACH payments.

As marketplaces compete for buyers and sellers, having a payment platform that collects and presents transaction data in an easy-to-use way can help marketplaces monitor transaction statuses and quickly respond to a support issue. 

Choose a marketplace payment provider that enables your business to run more efficiently, not one that adds more processes and moving pieces. If you’re going to join the Amazons of the world, ACH payments will allow you not to lose the rainforest for the trees.

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