Trust is at the core of any marketplace in order to build a community of loyal, returning buyers and sellers. Every marketplace wants to encourage activity—from buyers making purchases to vendors listing products or services. Trust is established when that activity is fast and frictionless.

Trust turns into repeat business, referrals and a scaling platform.

At the core is a streamlined payments experience.

Identify Your Funds Flow

When your marketplace chooses a payment API, the flow of funds will impact the user onboarding process and the eventual speed of transactions. For various types of users (e.g. individuals, businesses), there may be different requirements that need to be built into the onboarding process.

With Dwolla, marketplaces have the flexibility to create the customer type that fits their funds flow and control the timing of each transaction using different payment speeds. Configure the Dwolla API to collect, disburse or facilitate payments. Combine multiple funds flows to build a sophisticated marketplace payment platform.

For information about creating customers in the API and faster payments, refer to the marketplace payment examples in the sections below.
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Faster Payouts to Sellers

Koala is a marketplace onboarding buyers and sellers to its platform. In this marketplace platform example, Koala is the client using Dwolla as its payment solution for disbursements to sellers.

With the Dwolla API, Koala would create sellers as Receive Only Users, meaning the merchant could only receive funds. This lightweight onboarding streamlines the process of disbursing funds and keeps collecting personally identifiable information to a minimum. On the other side of the transaction is the client initiating the disbursement.

It’s important to note that with the Dwolla Platform, one side of each transaction must be verified. In this marketplace platform example, the merchant is created as a Receive Only User to streamline the onboarding and reduce friction. Because one side of each transaction needs to be verified, the client would be responsible for completing verification.

Documentation explaining more about Personal or Business Verified Customers within the Dwolla API can be found here.

“Account to account payments have really allowed us to scale and not worry about that part of our business. If you have a lot of customers that you need to pay, I don’t know if there’s a better solution than Dwolla. Having our payments done programmatically has worked really well for us.”
CEO of Good Buy Gear

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Dual Provider Approach to Collecting Payments

A single integration with the Dwolla API can unlock multiple funds flows and payment methods.

In addition to disbursements, consider the reason a marketplace would take a “dual provider” approach with account-to-account payments. Larger transactions come with higher credit card fees. For this reason, marketplaces will offer account-to-account payments alongside a credit card option for buyers.

Allowing buyers to pay for goods with ACH would require creating a Customer within the API. If the customer is not verified, they will have a transaction limit of $5,000 per week. After attaching a bank account, the buyer will authorize a payment to Koala (the client) or, in a facilitation funds flow, the seller directly.

Returning to the marketplace platform example Koala, buyers can now make a purchase and sellers can receive payment using account-to-account transactions. Koala is now a marketplace that can collect payments from buyers and initiate disbursements to sellers.

We have two different funds flows within the marketplace and a single API integration. Each funds flow comes with different transfer types.

Learn how to toggle between the different transfer types in the API here.

“It has been a plug-n-play solution. For us, the process of credit card payments would take two or three percent of our transactions, so a big concern for us was moving money efficiently. Especially with smaller transactions, Dwolla solved that for us.”
CEO of Bitmo

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As you build your own marketplace payment platform, reach out to our team and let’s talk through your use case.

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