Marketplace Payment Solutions Explained

Marketplace payment processing requires careful consideration of payment service providers, gateway options, and fraud prevention to ensure smooth payment flows between the buyer, seller and marketplace. This guide explains the main requirements of a marketplace payment system and walks through key factors for choosing the best marketplace payment solution for your business. Whether you’re launching a new marketplace or optimising an existing one, understanding payment gateway options alongside key compliance requirements and fraud prevention is essential for building a trusted, efficient payment process that scales.

What are marketplace payments?

Marketplace payments are specialised payment systems that handle transactions between multiple parties, including buyers, sellers, and the marketplace itself. Traditional ecommerce payments are a single payment received by merchants, whereas marketplace payment solutions manage complex payment flows that include; split payment processing, commission deductions, and multi-party payouts. 

For a comparison of leading payment service providers, read our guide on the top 5 marketplace Stripe alternatives in 2025 to see which platform is best for your business model.

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Types of payments for marketplaces:

There are a variety of different types of payments that can be used in marketplaces.

The most common are:

1. Split payments:

Split payments refer to the process of dividing a single incoming transaction into multiple parts for different recipients or funding sources. Marketplaces should have the ability to do this automatically through their payment service provider with capabilities to handle complex payment flows. Typically these capabilities include real-time fee deductions, rapid payouts, and assigned commission rates (depending on the item, seller or even transaction type). Imagine Uber processing a transaction from the consumer and splitting it between themselves and the driver in real-time, ensuring all fees, tips and commissions are deducted in a matter of seconds. 

2. Escrow payments:

‍Escrow services safely hold your funds in separate protected accounts where they can earn commission from safeguarded funds until the agreed conditions are met, then automatically release the payment to the right party. Good examples of businesses that can leverage escrow payments are service marketplaces like Upwork, ticketing platforms like Dice, and travel apps like Airbnb; all of which hold funds and delay payouts to build trust and manage risk.  

3. Delayed payments:

‍Delayed payments allow you to schedule payments for a future date with flexible hold periods and rules for automatic releases. This capability protects both parties from fraud and financial loss by ensuring delivery or completion before funds transfer. Take Upwork as an example, when a business hires a freelancer, Upwork accepts payment from the individual immediately but holds the funds until the freelancer completes the project and the paying customer signs off on the deliverable. This is an important payment type for e-commerce marketplaces 

4. Recurring payments:

‍Recurring payments enable you to set up billing at any interval of your choice and automated renewals that handle failed payments through retry technology. This is vital for marketplaces offering membership tiers, ongoing services, or regular deliveries where automated payment collection is critical to both platform and seller success. Consider Deliveroo Plus: subscribers pay a monthly fee for unlimited free deliveries, with the platform automatically charging members each month, handling failed payments when cards expire, and managing subscription cancellations, all processed seamlessly in the background.

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How to choose the right marketplace payment solution:

When it comes to payments for marketplaces, there are a variety of options to choose from. So, how do you decide which payment method is right for your business?

Here are a few factors to consider:

1. Geographic coverage

Payment providers vary in their regional support and local payment method integration. A payment provider that works well for US-based marketplaces may not support the payment requirements you need for a European market. Make sure that any payment service providers you’re considering cover the regions that matter to you. 

2. Fee structure

Pricing models differ across payment processing providers. Some charge a flat percentage per transaction, while others provide tailored pricing based on volume, payment method and geography. When comparing fee structures, consider:

• Transaction fees: Generally a small percentage plus a fixed amount per transaction
• Payout or withdrawal fees: Charged when transferring funds to sellers or bank accounts.
• Cross-border fees: Applied when payments involve different currencies or countries.
• Chargeback or dispute fees: Fees for handling refund or fraud claims.
• Monthly or platform fees: Some providers charge for ongoing platform access or API costs.

Understanding these costs upfront helps you forecast margins, set fair seller fees, and choose a payment provider that scales sustainably with your business.

 3. Payment operations

The right provider should streamline your operations and reduce administrative work. Consider whether they support the specific needs of your payment flows, for example, escrow functionality, delayed payments, recurring billing, or bulk payouts for paying multiple sellers at once. Also assess their dashboard and admin tools: can you easily handle refunds, disputes, and payment inquiries without contacting support? Do they have 24/7 dedicated support available when required? Find a payment provider that sets you up for success and treats you like a partner, not a cog in the wheel.  

4. Compliance and fraud protection

Not all payment processors offer the same level of compliance and protection. Look for providers that handle PCI DSS compliance and chargeback management services. If you're operating internationally, ensure they can help you navigate different regulatory requirements in each region.

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By considering these four factors, you can choose the right marketplace payment platform for you.

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Payment processing for marketplaces:

Marketplace payment processing requires specialised payment flows that go beyond standard e-commerce solutions. Unlike traditional online stores that handle single transactions between a business and customer, marketplace payment processing must manage complex split payment flows, delay funds between buyers and sellers, process omnichannel payments, ensure compliance across multiple vendors and more.

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Fraud prevention for marketplaces:

Marketplaces are an incredibly efficient way for buyers and sellers to connect and complete transactions. However, as with any online transaction, there is always the risk of fraud.

Here are key fraud prevention capabilities your payment service provider should offer:

1. Real-time transaction monitoring 

Advanced systems that analyse every transaction as it happens, flagging any suspicious patterns and blocking fraudulent activity so your marketplace is protected.

2. 3D Secure 2.0 and Strong Customer Authentication: 

Additional verification layers that confirm the customer's identity during checkout, meeting European regulatory requirements under PSD2, while reducing fraud and improving authorisation rates.

3. PCI DSS Level 1 compliance

The highest level of payment security certification, ensuring all card data is protected with enterprise-grade encryption and tokenization, so you don't need to manage complex security requirements yourself.

4. Full regulatory compliance and KYC/AML

Your provider should be regulated by financial authorities like the FCA and maintain automated identity verification and anti-money laundering checks for all marketplace users, ensuring full compliance with PSD2, PCI DSS, and KYC/AML regulations while you focus on growth.

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Why choose Ryft as your Payment Service Provider 

Ryft is a leading Payment Services Provider (PSP) that specialises in marketplace payment solutions, ensuring full compliance and offering 24/7 support from humans. Using Ryft, businesses can accept payments anywhere, automate split payments, onboard sellers, set up delayed payments and recurring billing, earn commission from payment escrow, and much more.