Marketplace payment 101: Choosing the best gateway for your business

In the rapidly evolving world of digital commerce, choosing the right marketplace payment provider is no longer a minor decision—it’s a core component of your platform’s success. Whether you're building a peer-to-peer rental platform, a service marketplace, or an eCommerce platform for independent sellers, the payment flow plays a critical role in ensuring trust, compliance, and smooth transactions.

In this article, we’ll walk you through how marketplace payments work, what to consider when choosing a provider, and a breakdown of the top 5 marketplace payment solutions you can integrate today.

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1. Understanding marketplace payment solutions

Unlike a standard eCommerce store, marketplaces operate on a two-sided model—where you must support both buyers and sellers. A marketplace payment platform must do more than just process credit cards. It needs to onboard sellers, securely manage funds, split payments, delay payouts, handle refunds, and comply with financial regulations.

Modern marketplace payment gateways offer tools to automate these tasks through APIs and smart dashboards, making it easier to scale and manage complex transactions.

2. How do marketplace payments work?

The marketplace payment flow is more complex than a standard checkout. Let’s explore each step in detail, based on common logic used by platforms like Sharetribe:

Step 1: Seller onboarding

Before sellers can receive money, they must be verified. This involves linking their account with a third-party marketplace payment provider like Stripe or PayPal, submitting identity verification documents, and adding bank details. Most payment platforms require KYC (Know Your Customer) compliance at this step.

Step 2: Buyer checkout

When a buyer initiates a purchase, they are led to a secure checkout page to input their payment details. The marketplace payment gateway will "pre-authorize" the funds—reserving the amount without transferring it yet. This ensures the buyer has sufficient funds and creates a window for seller acceptance.

Step 3: Seller accepts

Once the seller receives the request, they can choose to accept or decline. If accepted, the reserved funds are officially captured by the system. If declined, the pre-authorization is released back to the buyer. In some cases, instant capture is enabled if the transaction is low-risk or pre-approved.

Step 4: Delayed payout & buyer protection

Marketplaces typically implement delayed payouts, meaning sellers don’t get the money right away. This provides time for the product to be delivered or the service to be completed. If something goes wrong, a refund can be processed. This model builds trust and reduces fraud.

Step 5: Seller payout

Once the transaction is confirmed, the money is released to the seller. This is usually handled automatically by the marketplace payment processing system, and funds arrive in the seller’s bank account according to your payout schedule.

3. Key considerations for selecting a marketplace payment provider

When choosing a marketplace payment solution, here are some of the most important factors to keep in mind:

3.1. Check your marketplace’s needs

Your choice of marketplace payment gateway should match the structure of your platform—whether it's single-vendor, multi-vendor, or subscription-based. If you need features like mass payouts, commission collection, POS integration, or recurring billing, make sure the provider supports them natively to avoid costly workarounds later.

3.2. Fees and pricing

Review transaction fees, monthly charges, conversion rates, and any additional costs tied to international cards or alternative payment methods. A clear and predictable pricing model helps you manage profit margins and set platform fees with confidence.

3.3. Supported locations

Not all providers are available globally. Stripe is limited in some regions like Indonesia, while Dwolla is US-only. Check that your payment solution can support sellers and buyers in all your key markets without restrictions.

3.4. Payment methods

A good payment gateway should support cards (Visa, Mastercard), digital wallets (Apple Pay, Google Pay), local options (iDEAL, Giropay), and possibly crypto. More payment options reduce drop-off rates and improve the buyer experience.

3.5. Security and compliance

Choose a provider that offers PCI DSS compliance, 3D Secure, and KYC checks. These features protect user data, reduce fraud, and ensure your platform meets legal requirements without compromising user trust.

3.6. Mass payouts

If your marketplace deals with multiple sellers, mass payout features are essential. They allow you to automate disbursements, save time, and avoid manual errors—especially as your platform scales.

3.7. Transaction limits

Some providers set minimum or maximum transaction amounts. Knowing these in advance helps you plan your pricing strategy and avoid issues with large or small transactions.

3.8. Integration and developer tools

Look for providers with clean APIs, good documentation, and easy integration with platforms like Sharetribe or custom setups. Strong developer support will speed up your launch and reduce ongoing tech overhead.

3.9. Extra features

Advanced tools like automated tax handling, chargeback support, or white-labeling can add long-term value. While not critical from day one, these features help future-proof your marketplace and improve operations.

4 .Top 5 best marketplace payment platforms for two-sided marketplace 

In the realm of two-sided marketplaces, choosing the right marketplace payment platform can make or break the success of your business. The best providers offer secure, scalable, and customisable solutions that suit your region, business model, and user base. Below are five of the top-rated marketplace payment solutions used by leading global platforms.

4.1. Stripe Connect

Stripe is arguably the most popular marketplace payment gateway trusted by companies like Kickstarter, Lyft, and Booking.com. With support for over 135 currencies, it’s developer-friendly and highly scalable.

Key features:

• Seamless seller onboarding
• Split payments and commission settings
• PCI DSS compliance and Stripe’s fraud tool (Radar)
• Custom invoicing per seller
• Developer-first API and detailed docs
• Operational in 46+ countries, mainly the US, Australia, and Western Europe

Stripe Connect is perfect for marketplaces that want full control over the payment flow, offer service fees per transaction, and manage payouts with precision. It’s also used widely in custom marketplaces built with Sharetribe.

4.2. Braintree

A PayPal-owned provider, Braintree is a flexible solution for both web and mobile marketplaces. It offers global marketplace payment processing with support for over 130 currencies.

Key features:

• Split payment functionality for two-sided marketplaces
• PCI DSS compliance and fraud prevention tools
• Drop-in UI and advanced SDK for smooth integrations
• Merchants can act as MoR (Merchant of Record)
• Strong mobile payment support

Braintree is used by companies like Poshmark and HotelTonight. It’s an excellent choice for mobile-first marketplaces and platforms that want the trust of a PayPal-backed system with more flexibility.

4.3. PayPal Commerce Platform

PayPal Commerce Platform supports marketplace payments across 200+ countries, making it ideal for marketplaces with a broad, international customer base.

Key features:

• Managed or Connected models for seller payments
• Split and mass payouts
• Support for 100+ currencies
• 3D Secure 2.2 for enhanced buyer protection
• Requires sellers to have PayPal Business accounts

Trusted by marketplaces such as Grailed and Replin, PayPal remains one of the most accessible and recognisable brands in global eCommerce.

4.4. Mangopay

Mangopay is a European-first marketplace payment solution, used by platforms like Vinted, Rakuten, and Wallapop. It offers a powerful white-label API and a flexible e-wallet structure for handling complex payment flows.

Key features:

• Support for multiple currencies and local payment methods
• Escrow capabilities with automated payouts
• White-label setup and wallet creation
• Compliance with PCI DSS, PSD2, GDPR, and 3D Secure
• Customisable dashboard for transaction management

Mangopay is ideal for platforms needing robust compliance, fund segregation, and control over the marketplace payment flow.

4.5. Adyen

Adyen is a globally recognised payment platform used by eBay, Uber, and Etsy. It combines strong fraud protection with seamless global coverage, offering a standardised customer experience across countries.

Key features:

• Support for 37+ currencies and diverse payment methods
• No setup or monthly fees
• RevenueProtect for fraud and risk management
• PCI DSS compliance
• Operational in the Americas, Europe, and parts of Asia

Adyen’s strong security and cost-effective model make it suitable for large-scale platforms as well as startups with plans for global expansion.

5. Journeyhorizon – your marketplace expert from build to scale

Choosing the right marketplace payment gateway can feel overwhelming—but it doesn’t have to be. When you work with an experienced marketplace expert, you won’t need to figure it all out on your own. From your platform’s structure and business model to region-specific compliance, a trusted advisor can help match your needs with the right payment provider.

Journeyhorizon is a specialist in building and scaling marketplaces. Whether you're starting from scratch or looking to grow, we guide you through every step—product strategy, tech setup, payment flow, and go-to-market success. With our experience, we don’t just help you build a marketplace. We help you build a marketplace that works.

Talk to Journeyhorizon today and start your journey with confidence.

6. Conclusion

A smooth, secure, and scalable marketplace payment system is essential to your platform’s success. From handling seller onboarding and split payments to ensuring compliance and improving user experience, the right payment gateway lays the foundation for long-term growth. But remember—you don’t need to make this decision alone. With an expert like Journeyhorizon by your side, you’ll receive the guidance and technical support to make smart, strategic decisions tailored to your business. Choose the right partner, and your marketplace will be built not just to launch—but to scale.

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