Technology toolkits such as application programming interfaces (APIs) have enabled small businesses to use simple programming to extend online payments to consumers, and the same technology can be applied to marketplace transactions.
Merchants are turning to online marketplaces to expand sales globally, allowing the marketplaces to give them a presence in regions that they wouldn't be able to reach on their own. But in doing so, some stores are making compromises on how they handle payments.
"Many of the merchants are using three or four gateways or more," said Ralph Dangelmaier, CEO of BlueSnap, adding that complex mix of payment venues can be simplified.
The Payments for Marketplaces platform, which BlueSnap released Thursday, is designed to execute payments in near real time, manage sales reporting and onboard sellers. The platform also automates "split" payments, or transactions that divide commissions between the marketplace and its sellers.
Marketplaces is built on top of the BlueSnap's Powered Buy Platform, which includes digital payments technology and BlueSnap's global network of acquiring banks. The Powered Buy Platform connects merchants to local banks, and uses a backup server to ensure payment authorization. Visa and Mastercard have integrated the platform into Visa Checkout and Masterpass, Dangelmaier said.
The merchants that use BlueSnap's system, including small service providers, can automate the payments they collect and they fees they pay for using the online marketplace. "They're usually doing that manually," Dangelmaier said.
The growth of online marketplaces, particularly alternatives to established players like Amazon and eBay, is drawing a lot of attention from technology companies that hope to facilitate payments from consumers to merchants and from consumers to marketplaces.
Trouva has used Braintree's software development kit to boost online payment conversion for web marketplaces. And after getting its start as a group payment facilitator, WePay pivoted to web marketplaces, providing payment services, technology and risk management. Facebook has also launched a marketplace and the Israel-based marketplace Wix has collaborated with Square to help marketplace merchants sell offline.
BlueSnap is releasing its platform as general business-to-business and business-to-consumer invoice automation is accelerating, Dangelmaier said, adding he's noticed an increased use of the payment credentials that BlueSnap has embedded into its invoice delivery engine. The company has tokenized the credentials to enable single-click transactions.
"The technology has evolved to make it easier for businesses to use," Dangelmaier said, adding the APIs make it easier for businesses to bring e-commerce style transactions to the larger business-to-business invoices, which can range from $1,000 to $10,000.
The complexity of the marketplaces likely makes digitizing business-to-business payments such as split commissions a distinct product from consumer e-commerce payments.
"Anything is possible, but normally business-to-business payments are a specialty solution. Some B-to-B payments are funded by a card, but really the similarity ends there, so it’s pretty difficult for a B-to-C payments company to cross over to the B-to-B space without losing focus on the core business," said Rick Oglesby, president of AZ Payments Group.
The use of open technology tools is also expanding rapidly among payment providers outside of digital plays, said Zil Bareisis, a senior analyst at Celent.
Bareisis argues that in the "sharing" economy, the definition of who is a merchant is broadening to include many more people. Uber drivers and Airbnb lessors are collecting money for services, or goods sold on an online marketplace, often with no borders. Since international bank payments are too expensive, that opens the market to innovation from technology companies, according to Bareisis.
"Vantiv's O.N.E. program and a recently announced decision by First Data to create an integrated solutions group point to the opportunity established providers have in strengthening their relationship with the developer community, and helping those developers integrate their offerings much deeper into a broader set of solutions needed by the business," Bareisis said.