Marketplace payment processing: What it is and how to choose the right provider

Key takeaways: 

• Marketplace payment processing solutions facilitate global transactions between buyers, sellers, and online marketplace operators.

• When shopping for a payment processor, look for the ability to handle split payments, automated fee payments, flexible payout options, and security measures to ensure transactions are fully compliant.

• A good marketplace payment processing platform should prioritize security, payment flexibility, worldwide coverage, and hassle-free integration.

Marketplaces now dominate online shopping. In fact, 78% of international shoppers prefer buying through platforms like Amazon, Etsy, or Rakuten over other channels.

That shift gives you the chance to take your business global. It also opens up real growth opportunities – if you effectively manage the flow of payments between your customers, sellers, and marketplace.

Unlike a traditional eCommerce store, a marketplace needs to support multiple parties, currencies, and payment methods at once. That’s where the right payment processor becomes essential – helping you split payments, deduct fees, handle local payouts, and stay compliant with global regulations, all while managing countless moving parts in every transaction.

This guide explains how marketplace payment processing works, what to look for in a provider, and how to choose a solution that supports your marketplace as it scales.

What is marketplace payment processing?

Central to the success of marketplaces is the role of seamless payment experiences. Marketplace payment processing refers to facilitating transactions, including accepting payments from buyers and paying out funds to merchants.

Because marketplaces involve multiple parties and payment flows, payment processing can get complex. Yet despite this complexity, seamless, secure, and flexible payment solutions have defined the marketplace experience. Payment technology provided by payment processors, integrated into marketplaces, enables this.

Marketplace payment processors often handle split payments, currency conversions, fee calculations, deductions, and compliance checks in real time. That’s why it’s important to work with a marketplace payment processing tool that can keep the financial machinery running smoothly.

Airwallex Payments for Platforms is built for precisely this. It lets you accept over 160 payment methods in more than 130 currencies, route funds accurately between parties, and reduce conversion costs when entering new markets.

How marketplace payments work 

When a customer makes a purchase on a marketplace, a sequence of steps begins to ensure secure payment processing and proper fund distribution.

Here's how payments generally flow through an online marketplace:

1. A buyer initiates a payment (in their local currency) at checkout.

2. This transaction is verified and authorized, then processed by the marketplace payment processor.

3. The funds are collected and deposited into a bank account. If buyers and sellers are using different currencies, your payment processing partner should be able to handle automatic currency conversion easily. With Airwallex’s built-in multi-currency support, you can accept payments and disburse funds globally, without the hassle of manual conversions or extra providers.

4. Some platforms may hold the payment in escrow until the order is marked as completed or delivered.

5. The provider will then disperse their earnings to the merchant in their preferred currency, minus any platform fees.

As an example, we've visualized below what this process looks like when a US customer buys from an Australian merchant and vice versa when an Australian customer buys from a US merchant.

This is one simplified example, but most marketplaces have drastically more complex processing needs. As your marketplace scales, the ability to manage these flows efficiently becomes a key part of building momentum and activating the marketplace flywheel effect.

A payment processor like Airwallex optimizes this process by automating payments for marketplaces and providing transparent transaction tracking.

It also manages split payments regardless of complexity, handles conversions across multiple currencies, and ensures full compliance when transferring funds across borders.

How payouts work 

Marketplaces facilitate payouts to sellers through three primary methods: real-time payouts, card and bank payouts, and scheduled payouts. Real-time payouts allow for instant access to funds immediately after completing a transaction, freeing up cash flow.

On the other hand, card and bank payouts offer different advantages depending on the seller's needs. Virtual card payouts provide immediate access to funds, while bank transfers efficiently handle larger amounts with potentially lower fees across international borders.

Scheduled payouts create predictable cash flow through automated transfers. These usually (but don’t have to) happen on a daily, weekly, or monthly cadence. This system allows sellers to plan their finances more effectively while reducing administrative work for you.

That said, a good marketplace payment processor will offer a range of payment settlement models, including:

• Instant settlement (funds are transferred immediately)

• Split payments (funds are automatically divided between multiple parties)

• Commission handling (fee calculations and deductions are handled by the platform)

• Marketplace on-demand payments

Considerations for choosing a marketplace payment processor 

When selecting a payment processor, start with financial and compliance considerations. Evaluate all fees, including transaction costs and currency conversion charges, and seek transparent pricing without hidden costs.

The right processor will maintain compliance with industry standards while simplifying merchant verification through automated KYC checks and simple onboarding procedures, minimizing administrative burden.

Technical capabilities and global reach are equally important factors. To ensure smooth integration, look for well-documented APIs with robust technical support and sample code.

Your processor should operate in all your target markets, supporting relevant currencies and a diverse range of payment methods.

With Airwallex, you can accept over 160 payment methods and provide fast local payouts to more than 150 countries and regions. This lets you serve merchants and customers worldwide while maintaining competitive fee structures that can scale with your business volume.

Top marketplace payment solutions for your business  

Choosing the right payment solution is important in achieving market success. The options detailed in the sections below are all distinguished by robust features that maintain security and compliance, reduce operational friction, and resolve complex payment flows.

Airwallex

Leading marketplaces leverage Airwallex’s 60+ global financial licenses and support for over 160 global payment methods to reach new customers and expand into new markets. Fast payouts are a key differentiator, as Airwallex operates in over 150 countries to facilitate instant transfers to bank accounts or platform-issued debit cards.

Plus, cost-effective currency management allows fund collection in multiple currencies and countries, along with like-for-like settlement. You can then disburse those funds to merchants in their home currency, avoiding double foreign exchange conversion.

Stripe Connect

Stripe Connect offers a customized payment solution with a reputation for comprehensive API documentation and robust developer tooling.

Adyen

Adyen provides end-to-end payment processing with advanced risk management and data analytics capabilities. Their marketplace solution offers local payment methods in 100 countries.

PayPal for Marketplaces

PayPal for Marketplaces helps platforms onboard sellers quickly, and supports split payments, seller onboarding, and global compliance out of the box. Many consumers already have PayPal accounts, making checkout fast and familiar. However, fees can be higher than those of other providers, especially for cross-border transactions.

Checkout.com

Checkout.com has a strong global presence. It supports various payment methods and currencies, and offers features such as split payments, dynamic currency conversion, fraud prevention, and compliance tools.

Checkout.com’s services are geared more toward enterprise clients.

Scale your marketplace with the right payment processor

A great marketplace experience doesn’t end at checkout – it starts there. The way you move money impacts everything from how quickly sellers join your platform to how likely buyers are to return.

Airwallex Payments for Platforms gives you the tools to build a fully integrated, global pay-in and pay-out experience. Accept payments in over 170 currencies and 160 payment methods, connect sellers using compliant onboarding, and split funds instantly while deducting your platform fee. You can make fast payouts to over 150 countries, issue cards, and reduce unnecessary FX costs with like-for-like settlement.

Whether you’re building a marketplace, SaaS platform, or on-demand service, Airwallex helps you handle your payments securely, efficiently, and at scale. Because when payments work the way they should, everything else moves faster too.