Marketplaces are all the rage, fueled in part by a boom in collaborative consumption business models. Interest in them has only accelerated since we wrote a post around marketplaces and payments back in November 2012. For a multitude of reasons the default payment assumption when approaching a marketplace is "I need to collect money from the buyers on my site, keep some sort of fee for myself, and then disburse or payout the rest to the seller." Sounds easy but turns out to be very hard.
Collecting and disbursing money gives you a lot of control as a marketplace. However, it also opens up a whole range of regulatory issues from whether you're a money transmitter to how you mange things such as fraud and chargebacks. Balanced embraced the challenge to help marketplaces strive. Stripe recently added disbursement capabilities and discussed processing $500,000 per day.
Still, many markets outside the U.S remain underserved or try to get by with PayPal's adaptive payments API. We saw a competing trend and wrote about that last year. It is becoming significantly easier for anyone to get a merchant account and thus accept cards. What Square was doing for the POS world Stripe was doing for online sales. Braintree played catch up and now supports instant onboarding in some markets. New providers like Pin Payments in Australia and PayMill in the EU showed up. It struck us as the better model for many marketplaces to allow/make your sellers get their own merchant account to collect funds for the sale of their services or goods.
Using Spreedly, marketplaces can see all of the transactions moving across their platform. If a transaction takes place, look at the amount, calculate your % and then you directly charge the card on file for that particular seller. We've seen vacation rental marketplaces be the first early adopters of this model but it's happening with others as well. The news recently by TaskRabbit and Braintree reinforces the validity of this model. TaskRabbit allows buyers to purchase services from sellers within the TaskRabbit marketplace. Those "services" are a range of things from walking a dog to buying roses and hand delivering them to your sweetheart at the office.
In the old model TaskRabbit had to collect money for the service, hold those funds, take a cut, then pay the TaskRabbit out upon completion. The relationship with Braintree now means in effect each individual TaskRabbit has a (sub) merchant account to accept cards. I'm not sure of all the nuances of the $$ flow and commissions etc - but it is a seismic shift. In this case TaskRabbit has enough control that it can dictate to the TaskRabbitter that they work with Braintree so a single relationship makes sense.
If you're a vacation rental site working globally though you're going to to have to work with a lot of options - especially if you want to work with rental properties who already have a processor relationship. Either way though the important point is you've removed yourself as the middleman for holding the funds. There will always be a segment of the market that wants to hold and disburse funds.
What's different now is the availability of a new model. It's a model that we think will become the more predominant one as the ability to accept payments becomes easier. We expect more and more sites to follow.