How the right marketplace payments provider can save you money

Online marketplaces are booming. But as your marketplace expands and you begin to do business in different parts of the world, you might find that the payments platform you started out with is not robust or comprehensive enough to support the growth of your business.

Payments for marketplaces are complicated — with split transactions, payouts to multiple vendors, potential chargebacks, and a lengthy onboarding process — and they become especially complex when you begin to operate in multiple regions around the world.

But the truth is, marketplace payments don’t have to be so cumbersome (and expensive) for your business. The right payments provider can smooth out the kinks in your global marketplace payments process and, as a result, help you minimise costs and maximise profits.

Here are 4 things to look for to ensure that your payments provider helps, not hurts, your bottom line.

4 ways the right payments provider can save you money

1. Fast & frictionless onboarding

The sooner you can onboard new vendors, the sooner you can begin processing transactions and making money. The trouble is, many payments providers can take weeks to complete the underwriting process to get your marketplace vendors up and running.

How many potential sales would you lose in the days or weeks you’re left waiting? Too many.

Luckily, some payments providers offer an easy onboarding process that allows you to hit the ground running with minimal paperwork and without skimping on the required due diligence. Even if you don’t have all the necessary information upfront, you can start processing payments right away and work with the provider to complete the setup over the next few days.

2. Global payments & localised checkouts

When you’re selling online, you shouldn’t be limited by borders. But many marketplace providers only offer their solution in one region, with one bank, or one currency.

As your business expands, these limited options will increase the risk of the transactions being rejected, possibly flagged as fraud, deterring global customers from completing the sale and increases the complexity of payouts to global vendors.

For example, say you’re a US-based marketplace that connects with local florists to deliver fresh flowers to shoppers who ordered online, but you want to expand beyond the US to send flowers, to enable customers to send flowers to their grandmother in London. The local florists in the UK will want to be paid in Euros, and shoppers in the UK will expect to see their local currencies and payment options on the checkout page.

With the right payments’ provider, you can connect to multiple banks around the world and customise the checkout experience to meet the needs and expectations of your global customers. This seamless global expansion will increase your overall revenue and decrease the expenses associated with foreign exchange fees, fraudulent or failed payments, and dissatisfied international customers.

3. Split transactions & simple money management

Managing split transactions is, perhaps, the most difficult part of marketplace payments.

Let’s go back to our florist example to illustrate this difficulty. If your marketplace partners with a local florist and the florist partners with a delivery service, then the transaction request made by the shopper will need to be split between the marketplace owner, the florist, and the delivery service company. Multiple vendors on a single transaction — especially if these are international vendors and they each accept different currencies — makes the payout process a nightmare for the marketplace’s financial manager.

However, with the right marketplace payments provider, a simple API can relieve you of this process, saving you time, money, and frustration. The provider will manage the fees, splits, and payouts automatically based on customised commission splits, so the marketplace’s financial manager doesn’t have to worry about handling money directly. This added efficiency allows marketplace financial managers to think more strategically about their role, focusing instead on building accurate reports and working with vendors to meet their SLAs.

4. Robust & detailed reporting

Speaking of accurate reports, maintaining an adequate, in-depth view of transaction history and vendor performance is especially challenging for global online marketplaces. With data coming in from multiple countries, in multiple currencies, and for multiple vendors, how can you possibly manage it all?

The right marketplace payments provider will help you view and manage reports much more efficiently. Beyond the basic transaction reporting, a good payments provider will pull together streamlined reports for vendors as well. Through these reports, you can see not only how transactions are being split and what you owe, but also how each vendor is performing.

For example, you might find that one of your vendors, a local florist, is consistently receiving customer complaints and chargeback requests due to poor service. Excessive chargebacks, of course, are a revenue drain for your business, so you might make the decision to cut ties with that vendor to save money. Trends and complications like these might not be immediately obvious to you with less detailed or disparate reporting capabilities, and in the long run, it could cost you an incredible amount of money.

In that way, a payments provider with a comprehensive suite of reporting tools can help you manage your entire business more effectively and more profitably.

Choose a payments provider who can grow with you

As your marketplace continues to scale, you need to find payment provider who can connect you with the customers, resources, and capabilities you need all around the world. Without the necessary features for processing global payments efficiently and effectively, you’ll lose money, deter customers and hinder your business growth.

Look for a marketplace payments provider who offers quick onboarding, global payments, localised checkouts, split transactions, and robust reporting — and begin growing your global business the right way.

About Brad Hyett

Brad Hyett is the Managing Director at BlueSnap and oversees all aspects of the European go-to- marketing operation and growth strategies.  Having previously worked at Worldpay, Brad has in-depth knowledge about the acquiring needs of Tier 1 high street names. Following that, he was responsible for new business at The Logic Group, focusing on European top-tier payment solution requirements. Most recently, he launched SlimPay, a French direct debit provider into the UK and Irish markets.

About BlueSnap

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