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.
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.
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. Faster payments can give marketplace businesses a competitive advantage when trying to stand out amid all the options available.
The competitive advantage that the different payment capabilities can provide to an online marketplace–ACH, Push-to-Debit, Credit Cards or Real-time Payments–gives each marketplace the option to complement its offerings with the payment type that makes the most sense for their users.
Improving Your Marketplace Payouts
Our focus at Dwolla is being the ideal platform for marketplace payments. We want these emerging marketplaces to run as efficiently as possible from a payments perspective. That means having a timely, secure marketplace payment integration.
Marketplaces are constantly accepting payments from buyers and paying out to merchants.
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.
Important Aspects of Marketplace Payments
We want to make it easy for a consumer to make a purchase on your marketplace. The ideal marketplace payment integration should create a positive user experience, making it easier for a customer to buy the things they want.
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.
Marketplace Payment Processing Options
Because of how common they are to most consumers, accepting credit cards during the pay-in portion of the transaction is common. Cards are ubiquitous and convenient for the consumer but come with high fees for the marketplace that are often passed back to the customer at higher prices.
As you search for a marketplace payment solution, choose one that can deliver hundreds or thousands of payments each day in a way that doesn’t disrupt daily business operations or come with costly fees for making a payment.
ACH payments can eliminate the process of writing, mailing and managing paper checks by sending funds directly to a bank account. The result is a significant time reduction in the process and cost of making a payment.
As marketplaces compete for buyers and sellers, 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. Marketplaces need a payment provider 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 emerging marketplaces.
Instant Payouts to a Debit Card
Instantly send money to a debit card with Push-to-Debit payments. The speed, efficiency and control associated with Push-to-Debit payments can help a marketplace overcome a number of challenges, and is flexible enough to include unbanked customers.
Push-to-Debit payments allow you to get money into the hands of your merchants faster, which is a major competitive advantage. Marketplaces in any industry have found a demand for faster payments
Are marketplaces a use case for 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.
Why would a marketplace use RTP? Considering the user experience of the marketplace, having the ability to immediately send payments directly into an end users’ bank account is a real advantage.
No checks to mail or processing delays.
While a RTP transaction is irrevocable, with final settlement to the receiver account happening immediately—much like a cash transaction—RTP is a much more immediate way of sending payments.
With the many payment experiences to choose from, we recommend marketplaces choose a payment service that enables the business to run more efficiently, not one that adds more processes and moving pieces.