Advice Needed: Payment Processing For a Two-Sided Service Marketplace

[gamemaniac]

Hey guys!

I wasn't sure if this is the right place to post, but since there are people here who have built stuff before, I wanted to shoot my shot.

So me and my partner are currently tinkering on an idea based on a very specific niche in the service industry, and looking to build a two-sided marketplace to cater to it.

While the tech aspect is being handled just well, we are a little lost in terms of finding the right solution for managing the payments and compliances on this platform.

Essentially, we want to be offering the option of PayPal, Credit/Debit Cards, Crypto for buyers to pay for the gig; and on sellers side, the option to withdraw through PayPal, Bank Wire and Crypto. This is the bare minimum.

I believe there are a good amount of options as far as crypto payments are concerned. But for fiat, I've been digging a lot, and have found through my research that most payment gateways treat digital products/services as high-risk categories, and therefore don't want any part of it. And some who do support this category do not work with marketplaces.

There's only one I've found so far, who seems to be accepting marketplaces in this domain, but they require us to be registered in US/EU/UK with a local director over there.

I don't mind considering setting up abroad, but we are only just starting with this platform, and I don't even know yet if it would be able to take off. So setting up a company abroad will come with a bunch of challenges of it's own in terms of compliance with the local law, of course.

What are our options here?

 

[Simon4466]

For this I would recommend Stripe as it is by far the easiest to get started with for such a project. Once it is up and running and people are using it then feel free to look into processors that may be cheaper / more suited for large corps (Adyen and the like), but to start Stripe should be perfect in my opinion (especially if only used to get your project launched ASAP).

 

[JackAlabama]

I did venture into 2sided marketplaces in my past (its a very tough business model and requires a lot financing to solve the chicken/egg issue), stripe worked well. Its flexible enough due to its API to have it custom-tailored to the workflow as you want it to.
You might want to pay the service providers from your company bank account.

 

[Marzio]

its a very tough business model and requires a lot financing to solve the chicken/egg issue

This is the best advice you could get in this thread.

Unless you are filling a very specific niche or solve a very specific problem i would avoid this business model.

Beside solving the chicken-egg problem two sided markeplaces suffer from multi-tenanting.

People can sell their products on eBay and Etsy at the same time.

The goals is to design your two sided marketplace in a way that you “lock-in” (particularly the supply side), so that members won’t be tempted to multi-tenant.

 

[daniels27]

You can use PayPal or Mangopay
https://mangopay.com/use-cases/retail-marketplaces
https://www.paypal.com/us/enterprise/industry-solutions/platforms-and-marketplaces

Of course, sellers will multi-tenant, but I guess they only way to getting it started is with like 0 fees for sellers. (Remember eBay Germany is free for private sellers for about 2 years already.) There is space for some marketplaces, but you will need to be in a niche and most likely have a very advaned catalog making it easy for customers to find products, something which on generic marketplaces like eBay is not possible).