Streamlining Marketplace Payments with Split Payment Solution
Splitting payments into various ledger accounts can be a challenging task for ecommerce businesses, especially marketplaces where payments need to be split among the platform and multiple sellers. One approach that can help manage marketplace transactions and distribute payments to multiple recipients is called split payment.
What is split payment?
Split payment is a payment processing method that allows ecommerce businesses, particularly marketplaces, to split online payments to multiple recipients. This means that when a customer makes a purchase, the payment is automatically split into multiple ledger accounts, with each recipient receiving their portion of the payment directly.
How split payment works for marketplaces
Split payment offers a convenient and streamlined way for ecommerce businesses to process and distribute payments to multiple sellers.
For example, imagine a customer placing a single transaction containing two items from two different sellers. In this case, the marketplace platform would need to split the payment into at least three different ledgers: revenue accounts of the platform and for each of the two sellers. If you do not process too many transactions every month, this might be something you can afford to manage manually. But as you scale the business and start handling thousands to millions of transactions per month, you certainly need a more efficient and scalable solution to manage complex scenarios of splitting payments in a way that is idempotent, auditable and error-prone.
Benefits of using split payment in your marketplace
- Simplifies payment processing: By automatically splitting payments into multiple ledger accounts, ecommerce businesses can reduce manual work, increase efficiency, and save time and resources.
- Eliminates manual work and minimize human error: Eliminates manual work and reduces human error: By automatically splitting payments, the likelihood of errors and the need for manual reconciliation is minimized, ensuring that payments are accurately distributed to each seller based on their share of the transaction.
- Improves seller satisfaction and retention: Split payment enables merchants to receive their share of the payment quickly and efficiently, enhancing seller satisfaction and retention.
- Builds trust with sellers: Providing transparent fee structures and custom-made ledgers helps build trust with sellers, leading to increased satisfaction and loyalty.
- Provides scalability to accommodate growing ecommerce businesses: As ecommerce businesses grow and process more transactions, split payment provides a scalable solution that can handle complex payment splitting scenarios with ease.
Managing payments across multiple sellers can be a challenge for any marketplace businesses. That's why our split payment solution offers custom-made ledgers and transparent fee structures to simplify operations and increase seller retention. Based on our experience, businesses that use split payment solution have seen up to a 25% increase in seller retention with faster payout cycles and up to a 90% reduction in manual work when reconciling money movements.
Marketplaces may take different approaches to split the pay between the platform and the seller. Some marketplaces may charge a fixed percentage of the amount as a fee, while others may offer different fee structures based on the type of product sold or the membership level of the seller. For this reason, marketplaces should be transparent about their fee structure.
This is important to build trust and encourage sellers to use the platform. It is also vital to manage complex money movements such as post-settlement refunds, tax calculations, customs fees, etc. Using custom-made ledgers, marketplaces can streamline operations and respond quickly to any edge cases that might crop up.
Are you considering our split payment solution for your marketplace ? We're available to discuss it with you at your convenience. We welcome open communication and are eager to share information about this solution. Don't hesitate to reach out to us anytime.