Online marketplaces are helping e-commerce flourish by connecting vendors and shoppers from around the world in one streamlined platform. However, when a company expands its marketplace and starts a business in several locations, it may realize that its payments system is not enough to support the business for its growth.
Payments for marketplaces are quite complex, and involve payouts to multiple vendors, splitting transactions, a lengthy onboarding process, and potential chargebacks. Operating in foreign regions of the world makes this process more complicated and difficult. This difficulty can bring cause a crisis for your company, including fraud in transactions, customers having dissatisfaction, and your goodwill being ruined. This can prevent your business from growing.
However, it is not necessary that marketplace payments need to be expensive. The right payments provider can help in minimizing the costs of global marketplace payments and maximizing the profits of the company.
How Does a Marketplace Payments Provider Help a Company?
Quick and Smooth Onboarding:
The quicker a company can integrate new vendors, the faster it can start processing transactions and earning money. The problem lies in those payment providers that take weeks in completing marketplace payments. If the company waits too long for the payments procedure to be completed, it will start losing potential sales. Fortunately, there are some payment providers that complete the onboarding process quickly and easily. Even when the necessary information is not available right away, payments can start processing anytime. The provider will complete the setup within only a few days after that.
Universal Payments and Localized Checkouts:
Nowadays, companies have crossed the borders and expanded their online businesses in other countries. This is the path every company that sells online should follow. However, there are many marketplace providers that limit their services in one currency, one bank, or one region. These limitations increase the possibilities of rejected and fraud transactions.
For instance, suppose a company delivers inside the US, but people in the US want to deliver gifts to their friends or relatives who live in other countries such as the UK. Now, currencies in the US and UK are different, and sellers in both countries will expect payment in their own currencies. So, it is not very easy to expand your business from the US to the UK. You will have to meet the customers’ demand for several payment options on a merchant’s checkout page.
However, these problems can be solved with the right payments provider which can help you connect with many banks all over the world. Customizing the checkout experience can help to meet all requirements of customers from any country. Thus, the costs of foreign exchange fees can be reduced, and the overall revenue of the company is increased. Moreover, the number of fraud, dissatisfied customers and failed payments are also decreased.
Money Management and Split Transactions:
Split transaction management is the toughest task in marketplace payments. Suppose that a marketplace has a partnership with a local shop, and this shop is in a partnership with a delivery service. In this case, when the customer makes a transaction request, it needs to be split among the shop owner, the delivery service company, and the marketplace owner. A single transaction with multiple vendors is difficult. Especially, if all the vendors choose different payment options and accept different currencies, then the payout process becomes terrifying.
The right marketplace payment provider, however, can help you with the split transaction by saving you time and money. The fees, payouts and splits, everything will be managed by the provider according to the customized commission splits. It lets the financial manager of the marketplace be freed from direct money handling. So, these financial managers can focus on their own work, such as working with vendors and making precise reports.
Robust and Thorough Reporting:
International online marketplaces find it extremely difficult to maintain a detailed vendor performance and transaction history. It is a quite normal occurrence when you have to manage data in several currencies from multiple countries and different vendors.
Choosing the right marketplace payments provider, it helps the company to view and manage reports more efficiently. A report on the basic transaction is not enough, and you also need streamlined reports for vendors. A good payments provider is capable of pulling that together. In these reports, the company can also view the split transactions and the performance of the vendors.
For instance, you may notice in a report that a local shop which is your vendor, has been receiving complaints and chargeback requests from customers repetitively due to poor service provided. It can ruin the goodwill of your company if your vendors receive excessive chargebacks, so, you must end your partnership with this particular vendor. These types of problems can be solved immediately if you notice them soon, but the problem is that they are not obvious until you are faced with a serious crisis and lose a huge amount of money. There lies the importance of thorough reporting. So, choose a marketplace payments provider that has useful reporting tools to manage a business effectively and bring more profits.
Choose the Right Payments Provider
As a marketplace grows, there is an increasing importance placed on choosing a payment provider that can connect the marketplace with resources and customers throughout the world. These providers use several features for effective and efficient processing of global payments. So, without them, a company will lose money, have dissatisfied customers, and its growth will be hindered.
Many marketplaces have switched to marketplace payments providers and they are benefiting immensely. For instance, Autodesk, a multinational company has upgraded its marketplace payments provider, and have experienced a 20% increase in checkout conversions.
So, when you look for a marketplace payments provider, choose one that provides fast onboarding, localized checkouts, global payments, split transactions, and thorough reporting.