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Online marketplaces are websites or applications that connect buyers with sellers, offering a convenience to consumers. Marketplaces act as brokers, charging providers a commission for their services, or as final sellers, adding their own markup to vendor pricing.

Efficient payment processing is a hot topic, with decision makers across the industry wondering what is the best marketplace payment solution. 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. Niché marketplaces continue to sprout up to serve the specialized interests and needs of specific consumers.

Integrating an end-to-end, payment solution to affordably, reliably and securely collect or disburse funds is crucial to scaling an online marketplace. Account-to-account payments like ACH, push-to-debit and real-time payments give marketplace businesses a competitive advantage amid a myriad of consumer sites today.

Rather than relying on cards and paper checks for marketplace payment processing, account-to-account transactions give marketplaces a more seamless way to control the flow of funds between their business and end users.

How to Improve Your Marketplace Payment Options

Our focus at Dwolla is being the best marketplace payment solution for businesses to collect or disburse funds.

Marketplaces are constantly accepting payments from buyers and paying out to merchants, meaning the marketplace must constantly understand their customer needs. When onboarding new users, collecting information is probably one of the trickiest parts. A delightful onboarding experience creates trust between the marketplace and merchant. Paired with a seamless checkout experience, B2B and B2C marketplaces should offer different payment methods such as financing options, buy now, pay later and of course, credit cards.

Dwolla allows marketplaces to build this process into your existing onboarding flow, meaning your user isn’t sent to a third-party site to complete onboarding or checkout. Simply request an account and routing number and integrate this step into your registration. Once the time comes for a merchant to “cash out,” the funds are routed to its connected bank account.

Being able to collect money from buyers and pay vendors is easy, in theory. But with an unsuitable payments integration, your marketplace could be paying unnecessary fees or spending undue time on both ends of the transaction. As a marketplace, you want to collect payments as fast as possible and disburse funds on your schedule.
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Important Aspects of Marketplace Payments

Make it easy for a consumer to make a purchase on your marketplace. The ideal account-to-account payment solution creates a positive user experience for both the buyer and seller—making it easy to buy the things they want or sell items and access that cash when they want it.

The Nielsen Norman Group measures user experience in 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 their 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 and payments are a key part of that.
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Marketplace Payment Options

Credit Card Gateway

Because of how common they are to most consumers, accepting credit cards during the debit portion of the transaction is common. Cards are ubiquitous and convenient for the consumer but come with high processing fees or “swipe” fees for the marketplace that are often passed back to the customer in the form of higher prices. These fees increased in April 2022.

ACH Payments

ACH payments can eliminate the process of mailing and managing paper checks by sending funds from bank account to bank account. This significantly reduces the time and cost of making payments.

As online marketplaces compete for buyers and sellers, it’s becoming possible to actually recreate a traditional point-of-sale experience. Because of faster payment options like Next Day and Same Day ACH, funds can actually move between accounts in hours—not days or weeks. And all without the costly fees that come with credit card payments. Marketplaces can use ACH to have more control over each transaction—at a lower price point.

In addition to the actual transaction experience, having a payment integration that collects and presents transaction data in an easy-to-use format can help with monitoring transactions and responding to any support issues once the transactions have been initiated. Marketplaces need a payment solution that enables the business to run more efficiently, not one that adds more processes and uncertainty.

Being able to make payments online and accurately track transactions is necessary for online marketplaces.

Instant Payouts to a Debit Card

Instantly send money to a debit card with push-to-debit payments. This payment method combines the speed of a card transaction with the affordability and control of an account-to-account transfer. Marketplace businesses want to receive payments quickly and send funds when it works best to manage cash flow.

Real-Time Payments

One of the newest payment rails in the United States is the RTP® network that is owned and operated by The Clearing House.

Real-time payments are disbursements that can be initiated at all hours of the day. These are balance-sourced account-to-account payments that clear and settle near instantaneously. A disbursement from bank account to bank account in real time is the ultimate form of control for a marketplace business.

Why would a marketplace use RTP? Considering the user experience of the marketplace, having the ability to send payments to an end user’s bank account in real time is a significant advantage. There are no checks to mail or processing delays. Budget reconciliation is much simpler for accounting teams when you know funds have been sent and delivered.

RTP is just one of several account-to-account transfer types that an integration with Dwolla’s payment API can lead to. We’re helping marketplaces manage their complex payment flows and transaction timing.
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