Enhance Your Marketplace Payment Solution with Open Payments

In the U.S., digital payments are predicted to surpass $11 trillion in 2024. Of these payments, digital commerce takes the cake as the largest market, accounting for more than $7 trillion in total value. 

Online marketplaces have become the ultimate hub for commerce over recent years. Whether it’s shopping for clothes, home goods, professional services, software, or anything else, marketplaces play an essential role in connecting merchants with consumers and B2B clients. 

Providing a seamless and highly efficient marketplace payment process is vital for retaining both customers and merchants. However, doing so necessitates a dynamic payment system capable of integrating multiple payment gateways tailored to marketplace needs on both a local and global level. 

An open payments platform can offer the operational flexibility marketplaces need to customize their strategy with the gateways and payment rails that suit them best. 

Determining Your Needs for Marketplace Payment Processing

Marketplaces can vary widely in their design and purpose, with some tailored to B2C use cases and others developed entirely for B2B services. 

In other cases, a marketplace may serve both general consumers and business clients (for example, major global platforms like Amazon cater to both audiences). 

Despite this diversity, we can broadly categorize all as either single-vendor or multi-vendor:

1. A single-vendor marketplace operates exactly as it sounds—only one vendor offers products or services to customers. Payment processing on this type of marketplace is often much more straightforward, as the marketplace will only need to meet the geographic and technical needs of one sole merchant. 
2. Comparatively, a multi-vendor marketplace typically consists of hundreds or even thousands of different merchants, each with their own unique payment needs. Payments can quickly become complicated in this type of environment, as each merchant may be targeting audiences with distinct payment preferences. 

Most marketplaces fall into the multi-vendor category, making connections to multiple payment service providers (PSPs) and gateways critically important.   

Along with ensuring merchants in a multi-vendor environment can meet the needs of their customers, the marketplace must also consider the payment needs of the merchants themselves. Depending on factors like location and regulatory standards, each marketplace may need a different mix of payment gateways and other solutions to optimize their payment experiences. 

A multi-vendor environment can further enable marketplaces to allow customers to bring their own payment service provider to use on the marketplace. It can be tough for marketplaces to balance a bring your own provider strategy with the overhead of managing so many distinct integrations. 

Integrating Marketplace Payment Gateways with Open Payments

Strategically integrating a marketplace payment solution can significantly impact scalability. 

An efficient and cost-effective method for integrating your chosen marketplace payment solutions is just as important as working with the providers that best suit your marketplace’s requirements. A seamless integration process keeps your marketplace operating smoothly, even when juggling a diverse mix of merchant payment needs. 

The most common method in modern payments revolves around APIs. An API can securely transmit transactional data from the marketplace to the gateway, allowing for a fast and reliable authorization process. Of course, to leverage APIs, you need the right kind of payment infrastructure. 

Open payments technologies centralize all necessary connections into a singular platform environment, giving marketplaces a secure place to connect with hundreds of different providers. An open payments platform can offer simple integrations designed to meet complex compliance requirements. All you need to do is choose your connections and automated technologies handle the more complicated aspects on your behalf. 

Open payments platforms can also provide a payment orchestration solution that can keep your transactions flowing friction-free even when dealing with high volumes or sudden spikes. This operational flexibility becomes even more vital when dealing with changing regulations, as an open payment platform can simplify your method for meeting current compliance standards.  

Choosing to implement a marketplace solution rooted in open payments capabilities makes it simpler to experiment with different payment service providers (PSPs) without having to integrate every single provider available. You can adjust your platform configurations and transaction routing rules as needed to match the changing needs of your marketplace. Leveraging an open payments platform for a multi-vendor approach also opens the ability to support a bring your own PSP strategy for merchants while drastically reducing the overhead for the marketplace to integrate and maintain each individual connection. 

From routing transactions to different gateways based on chance of success to managing risk and fraud detection, open payments give marketplaces the freedom to focus on core business activities instead of dealing with the complexities of managing an entire payment infrastructure.

Which Marketplace Payment Solution is Right for You?

The choice of which marketplace payment solutions to use is incredibly dependent on the circumstances. Gateways and providers that work excellently for one marketplace may not service another quite as well. It all comes down to understanding your marketplace’s specific use case and the payment preferences within your target region. 

Spreedly’s open payments platform gives you the freedom and flexibility to choose the payment service providers that best suit your marketplace’s needs. 

Browse our selection of marketplace gateway connections and payment methods now. 

Download the Payments Orchestration eBook Below