E-marketplaces have quickly transformed the way sellers reach customers online and how consumers acquire the goods they desire. Companies like Amazon, Wayfair, and eBay have become fixtures in today’s e-commerce-centric world. By visiting an e-marketplace, consumers can easily browse and shop hundreds of different brands, products, categories, etc. — from an oil filter for a car to a cashmere sweater — and purchase nearly anything they are searching for within a single shopping cart and payment transaction.
However, providing this simple shopping experience can lead to a complicated payment system for e-marketplaces and sellers behind the scenes. The e-marketplace must consolidate all of these various products into a single transaction for their customer while facilitating payments to each individual supplier.
Many e-marketplaces rely on manual payments to each seller through Automated Clearing House (ACH) or electronic funds transfers (EFT) transactions, requiring the submission and storage of sensitive bank account information from suppliers. Funds can be delayed a day or longer. For smaller sellers relying on cash flow to keep their businesses afloat, or those leveraging drop ship methods, this delay can be particularly burdensome.
Virtual cards and seller cards can streamline e-marketplace payments
Marqeta’s modern card issuing platform can mitigate these concerns for e-marketplaces and their suppliers by automating and streamlining the overall payment process. Here are two ways e-marketplaces can leverage cards to pay out their suppliers with Marqeta:
1. Virtual cards for merchants: When a consumer purchase is initiated, the e-marketplace instantly issues virtual cards to pay each merchant individually. These cards can be set for one-time use and for the exact amount of a specific transaction, helping to mitigate the potential fraud that exists with paper check, ETF, and ACH methods. These virtual cards are an effective option for larger merchants that have the ability to process card payments through a point-of-sale system. Additionally, adding metadata into each transaction can help e-marketplaces with reconciliation down the road, such as tying an order ID to a specific merchant.
2. Seller cards: A physical seller card is issued to each newly onboarded seller to transfer funds following each sale or on a scheduled basis — daily, weekly, monthly, etc. These funds become available to the seller for near-instant use. With Marqeta’s Just-in-Time Funding, the e-marketplace can improve their cash flow by funding cards in real time, with the card holding a $0 balance until it’s used for a transaction. Seller cards are an effective option for smaller sellers that may not have a point-of-sale system and are looking for quick access to funds from their sales. Additionally, e-marketplaces can leverage specific merchant category codes (MCC) and spend amounts to build a rewards system on these cards for their sellers to further draw interest and adoption.
Through either of these options, e-marketplaces can enhance their payment experience while improving seller retention by replacing legacy payments and potentially earning interchange. And for suppliers on e-marketplaces, virtual cards and seller cards will keep them coming back, potentially moving all of their business to the e-marketplace that proves to be the easiest to work with and delivers payments in a quick, simple way.