If you aim to launch an online marketplace platform, it is crucial to offer customers a secure, fast, and easy-to-use payment solution. Invesp reports that 11% of consumers abandon their shopping carts due to a complex checkout process while 7% of the survey’s participants don’t make a purchase as there are not enough payment methods.
To ensure a seamless shopping experience and retain the audience, you should enable a variety of payment options — from credit and debit cards to mobile wallets — and digital transactions in numerous currencies.
Thanks to this, vendors of goods and services will be able to reach a wide audience and attract more clients, bringing you higher profit. It is possible to address these issues through the integration of payment gateway APIs, for instance, PayPal, Stripe, or Braintree.
A marketplace payment gateway allows for:
- verifying customer identity
- approving a transaction
- protecting from fraud and cybersecurity threats, insufficient - - funds, expired cards, as well as exceeded credit limits.
This article describes the key factors that you should consider when choosing a payment gateway. To learn more about online payment solutions, read our post “What is a payment gateway and how does it work? Top 3 solutions for marketplaces”., for instance, PayPal, Stripe, or Braintree.
When choosing a payment gateway system, make sure that it supports payment options used by the target audience. For instance, Braintree enables customers to make purchases employing the majority of credit and debit cards that involve Visa, Mastercard, Discover, American Express, UnionPay, and Diner’s Club. Braintree supports digital wallets that include Samsung Pay, Google Pay, Apple Pay, and Secure Remote Commerce.
With Braintree, an online marketplace platform can accept payments via PayPal, the world’s leading gateway. The main difference between them is that Braintree offers individual merchant accounts while PayPal serves as a third-party processor employing a single account.
By integrating PayPal, businesses allow users to shop online using their bank accounts, credit and debit cards, PayPal balance, PayPal Credit (for purchases starting from $99), as well as rewards like cash back and points collected from stores.
Stripe is another popular solution that makes it possible to use a variety of payment cards (Visa, Mastercard, American Express, JCB, Discover, China UnionPay, etc.) and mobile wallets (Google Pay, Apple Pay).
When looking for the best payment gateway for an e-marketplace, you should also consider whether it accepts transactions via local payment methods such as iDeal, SOFORT, Trustly, eps, GiroPay, Bancontact.
In addition, you should take into account changing customer needs. Statista informs that 82% of US consumers preferred to use credit and debit cards when shopping online in 2019 while 80% of the survey’s participants from Europe named payment services — involving PayPal and Alipay — as their favorite options.
In 2020, electronic and mobile wallets became the most widespread method, accounting for 44.5% of the global e-commerce sales, according to FIS. By 2024, these expenditures are projected to reach 51.7%.
Analysts report that credit cards amounted to 22.8% of e-commerce transactions while debit cards — 12.3%. The popularity of payment cards is expected to remain almost the same, decreasing to 20.8% and 12% respectively. Therefore, you should enable these payment methods when building a marketplace application.
Before choosing a payment gateway system, it is essential to verify that it supports the necessary locations. If you want to build an e-marketplace platform serving millions of customers globally, you should consider PayPal, which is available in over 200 countries and regions.
Stripe, Braintree, and other popular gateways also provide the possibility to serve users worldwide but with more geographic limitations. For instance, Germany, Argentina, Panama, Africa, Belarus, Ukraine, and Israel don’t accept Stripe. At the moment, Stripe allows for carrying out digital transactions in 44 countries.
To use Braintree, an organization has to operate and have a bank account in the USA, Canada, Australia, Europe, Malaysia, Hong Kong SAR China, New Zealand, or Singapore. Subject to these conditions, a marketplace application will accept payments from any part of the world. As of today, Braintree supports more than 45 countries and regions.
To integrate a payment gateway that will meet business-specific needs and budget, you should take into account transaction limits set by a solution provider. Stripe, for example, has a minimum limit of $0.50 and a maximum — of $999,999.99.
A maximum value will satisfy the requirements of most vendors, probably excluding companies that trade real estate and luxury cars online. Considering a minimum amount, it may not suit your needs if you aim to build an e-marketplace selling goods that cost less than $0.50.