The staggering expansion of online marketplaces has necessitated the processing of vast volumes of marketplace payments. Marketplace payment solutions, also known as payment gateways, paved their way as traditional payment systems were incompatible with the task, enabling you to handle payments within your multi-vendor marketplace with minimal effort.
Based on the number of vendors online, marketplaces are classified as single-vendor or multi-vendor sites. The type of marketplace site decides how payments are processed.
The scenario is more convoluted in multi-vendor marketplaces. To begin with, there are a plethora of vendors with a vast array of bank accounts. Secondly, marketplace owners must make a profit from managing the marketplace. Ultimately, multi-vendor marketplaces allow customers to purchase from several vendors, simultaneously. To make customers’ shopping experience more convenient, they should be allowed to pay for the whole cart in one go even though they are purchasing from several vendors.
But what exactly should one consider when choosing a payment processing solution for a multi-vendor marketplace, and why are these factors important?
- Availability in your target markets
Even though existing payment mechanisms have several similarities, you should pay considerable attention to relevant information. The availability of your products in your target markets decides when you will be able to receive fees in the markets where your company operates. Considering the currencies that a payment solution supports, this may also go a long way. The more currencies you can process, the more market prospects you can have.
- Compliance with requirements
Compliance with requirements assures that a payment system follows the applicable standards, laws, and regulations. Being well-informed about your Customer (KYC) and Anti-Money Laundering (AML) requirements, the General Data Protection Regulation (GDPR), and the Payment Card Industry Data Security Standard can all be governed by a payment solution (PCI DSS).
- A mass payments feature
Buyers may use the bulk payments feature to pay for several orders with a single payment. If an order contains products from several vendors, the payment system immediately disseminates the payment among the vendors.
- Tax reporting tools
Tax reporting software can be incredibly beneficial to sellers who use your marketplace. While tax reporting tools are not essential payment provider functions, they can be a great asset for vendors selling on your marketplace.
How to Choose the Most Appropriate Marketplace Payment Management System
Since each marketplace has its own set of business objectives, you can choose the payment providers that best serve yours. The following illustrates 3 aspects that will assist you in making your decision.
- Examine the availability of your target market.
- Prioritize payment system features based on your business objectives and if security and mass payments may be at the forefront of this movement, you may be able to forego funding for multiple currencies.
- Check to see if the recommended payment platform is simpler to incorporate into your marketplace. Although most payment providers advertise revamped SDKs and APIs that are convenient to adopt, you should also know how much integration will cost and how long it will take.