MarketPlace Payment Solutions allow platforms to offer MarketPlace participants the ability to accept payments without the need for their own merchant account.
MarketPlace Payment FAQ’s
1-How do MarketPlace Payments Work Let’s use Etsy as an example. Etsy offers artists, makers and entrepreneurs an easy way to sell their products. Etsy provides a platform that enable users to easily display their goods for sale. So a jewelry maker would upload photos of their creations, set pricing and shipping info and of course collect payment. Traditionally accepting payments would mean each Etsy user would apply for their own merchant account. This traditional need creates friction for Etsy clients. Many are unfamiliar with merchant accounts and the process of applying and providing supporting documentation is more hassle than having the platform is worth. Etsy and many other providers [PayPal was first] realized that if they could make payment sign up simple there would be much higher adoption rates. To that end Etsy has a MarketPlace Payment Solution. This means that Suzy Jones of ABC Jewelry selling handmade earrings can sign up with Etsy, provide some basic information [including bank account] and almost immediately be approved for accepting credit card payments. For every sale Suzy makes Etsy is acting as the Merchant of Record [MOR]. What does that mean?- Etsy has the master merchant account. Etsy decides on when Suzy gets funded and VERY importantly “Etsy” appears on the customer’s credit card statement–not “ABC Jewelry”
- Etsy ultimately deals with chargebacks or customer credit card disputes. Etsy terms of service will clearly spell out they get to debit ABC’s bank account to recoup monies already paid out to ABC
- Etsy funds the sale price less their typical 3.5% payment fees