Agile Payments Blog

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MarketPlace Payment Solution Challenges

Apr 16, 2019, 9:42:17 AM

MarketPlace Payment Solutions

MarketPlace Payment Solution Challenges

What are the challenges in MarketPlace Payments

Payment processing is inherently risky. Non-payment of fees, chargeback exposure and fraud are all areas where there can be potential $ loss.

In most marketplaces non-payment of fees is not an issue as the platform seller is funded the sale price less the typical  3-4% plus per transaction fee. So if Suzy Jones sells a $50 ring she may be funded $48.

But you still have potential chargeback exposure.  Someone buys earrings from Suzy and upon receipt is not happy. If they can’t resolve the issue with Suzy they could initiate a chargeback. When that happens the platform eg Etsy sees a debit to their business bank account from their credit card acquiring bank.MarketPlace Payment Solutions

Etsy in turn would debit ABC Jewelry. If that debit was not successful Etsy potentially eats the $ loss. This risk is fairly small but certainly has happened.

The fraud risk has the biggest loss potential. Someone applies to Etsy and sets up a bogus store. They have 100 stolen credit cards and place orders for fake goods. Etsy funds the fake business. The fake business withdraws all the money from their bank account and disappears. Those stolen cards charges are all likely to come back on Etsy as the entity that loses the money.

 

There are also compliance requirements. MarketPlace Payment Solutions must offer PCI compliant solutions and some are subject to obtaining a Money Transmitter License.

So there are definitely challenges in the MarketPlace Payment Solution space. Contact us for more info or a consultation.


Contact Agile Payments today

Wayne Akey
Written by Wayne Akey

Wayne Akey works collaboratively with SAAS providers whose clients have recurring billing needs to create innovative payment solutions and new revenue streams. He has partnered with dozens of software providers to create integrated payment solutions that solve recurring billing problems and generate significant recurring revenue. He has experience in: ACH Processing | Payment Partnerships | Payment Gateway Integration | Credit Card Decline Mitigation | Payment Aggregation. Wayne is the author of “Explode SAAS Revenue by 84%: A Guide to Geometric Growth using Integrated Payment Processing”. To learn how your software application can become a billing solution for your users as well as generate additional revenue streams, contact Wayne today at wakey@agilepayments.com. We guarantee you will learn how to improve revenue per client by at least 10% or we will donate $500 to the charity of your choice.

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