Marketplaces — online retail platforms that act as storefronts for multiple businesses — are nothing particularly new. From home goods to technology and beyond, marketplaces allow brands to leverage these platforms to find new customers. Marketplaces have been especially advantageous to small and midsized businesses looking for new ways to attract customers and bring in revenue in the ongoing wake of COVID-19.

However, as the demand for these marketplaces grows — and as marketplaces must compete with one another for sellers’ loyalty, there’s one thing holding them back: payout time for sellers. According to a survey report from PYMNTS and Visa called marketplaces “Retail’s New Front Door,” the average business seller waits just over three days to receive funds from each sale. Well over half of them (63% of small businesses and 61% of individual sellers) would switch to a new marketplace for faster access to proceeds. The same survey suggests that marketplaces offering real-time settlements could, collectively bring in as much as $216 billion per year from those U.S. sellers who are interested in switching.

“Real-time settlement is a capability that is so prized that many surveyed sellers might be willing to move their businesses to platforms that can deliver it. This finding is a call to action for marketplaces — there are no buyers to generate sales without sellers that offer great products, after all.”  - Marketplaces As Retail’s New Front Door

Faster time to settlement is clearly a powerful business move for competitive marketplaces. So, what’s holding them back?

Challenges of Settlements for Marketplaces

The primary challenge marketplaces face when it comes to settlements is determining how sellers should collect their payouts. This isn’t a new challenge, as the PYMNTS survey notes:

“Collectors and pack rats rejoiced when eBay launched in 1995 […]. A few hitches existed, though, foremost how sellers should collect their payouts. This friction has been present on digital marketplacesfrom eBay to Etsy and beyond since their inception but has become even more pronounced since March, when individuals, brands and stores with physical footprints began turning to digital commerce channels to find customers and make sales in the face of the pandemic.” - Marketplaces As Retail’s New Front Door

The primary source of friction here is identifying how to split payments among the different sellers included in each purchase. This would be simple enough if each customer’s shopping basket included items from only one seller, but that’s simply not realistic. After all, part of the appeal of marketplaces to customers is that they can purchase goods from a variety of brands in one transaction. It’s up to the marketplace, then, to divvy up the funds among the various sellers.

It’s a complicated process — especially for a marketplace whose partner pool, customer base, and transaction volume are growing quickly. While traditional billing systems and manual calculations may have gotten the job done in the early days when there were just a few sellers and a handful of transactions, these same systems fall apart in the face of growth. As a result, marketplaces find themselves struggling to process payments quickly, leading to errors, lag times in settlements, and ultimately, dissatisfied sellers who would rather take their products elsewhere.

Implementing Frictionless Marketplace Billing and Settlements with Gotransverse

It is sometimes possible to reconfigure or modify outdated systems to handle more complex transactions, such as marketplace settlements. However, this “Frankenstein” approach is rarely efficient, cost-effective, or successful in the long term. Rather, savvy marketplaces turn to agile billing platforms that are built to meet their needs.

The Gotransverse platform has marketplace billing built right into its core framework — no “Frankensteining” necessary — and it’s equipped to handle settlements rapidly and accurately to ensure sellers receive their much-needed funds in a timely manner. To make life even easier for our clients, the Gotransverse platform is built to enable seamless integration with the other platforms that underpin a business, from CRMs to ERPs to order management and more.

At Gotransverse, we’re thrilled to be leveraging our expertise in marketplace billing and settlements to be working with Salesforce, Matrixx, and Mirakl to develop a new solution for 5G marketplaces targeting B2B2X as part of the TM Forum Catalyst Program. In the meantime, we’re honored to use that same expertise to support our marketplace clients across the globe. To learn more about how the Gotransverse platform can streamline billing and settlements for your marketplace platform, we invite you to request a demo, and one of our experts will walk you through our platform and process.