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Payments for Marketplaces: Pros and Cons of 6 Payment Methods

Having the right solution in place to accept payments for marketplaces in the B2B space as well as apps and ecosystems can shape your platform and its success. Marketplaces face a number of challenges when choosing their preferred payment method. They want to be able to offer both buyers and suppliers the best experience possible, but they also need to consider costs, security, and other factors.

Of course, each marketplace has its own payment challenges to work around. Therefore, you should partner with a payment solution provider which has the necessary features for your B2B e-commerce platform. To find out which payment method is right for you, we analyze the different options available when it comes to payments for marketplaces, and what to look for in a marketplace payment solution.

What Are B2B Marketplaces?

A B2B marketplace is a type of e-commerce platform that brings together B2B buyers and sellers, enabling them to conduct transactions in one place. It operates in much the same way as a B2C marketplace does (think, Amazon), but is based on transactions between businesses. 

Other places that handle B2B payments online include apps and ecosystems, such as invoicing portals (for B2B payments generally or vertical-specific). B2B apps are applications developed to streamline business operations. In addition, they also help to simplify complex business processes or fulfill specific industry needs. They are used by businesses to connect with other businesses, clients, and employees, in addition to other stakeholders. 

B2B ecosystems are a network of complementary businesses. Members within a specific ecosystem often share ideal customer profiles (ICP), customers, prospects, and areas. The partnerships created within a B2B ecosystem help create opportunities to accelerate revenue growth in many ways.

What Are Payments for Marketplaces?

While purchases made by individual customers in a B2C environment typically require payment by credit card, PayPal, or some other method before delivery, in B2B online transactions, a website is normally used as a platform for placing orders – and payments are carried out offline invoice to invoice (ACH, wire transfer, or paper check). 

However, there’s been a shift in how B2B payments are managed. Embedded finance options are now becoming expected, even for B2B purchases that have traditionally been handled offline. Prior to 2020, 70 percent of B2B decision makers reported being open to making fully self-serve or remote purchases valuing over $50,000 – with 27 percent of those open to spending more than $500,000. That number is only expected to continue growing as embedded finance takes off and buyers, sellers, and platforms reap its benefits. 

According to Forrester, U.S. B2B e-commerce transactions are expected to reach $1.8 trillion by 2023. This would account for 17 percent of all B2B sales in the country. Places that handle digital B2B payments, including B2B marketplaces, apps, and ecosystems, know that it makes sense to facilitate payments in any way possible, and are all trying to figure out how to navigate this hurdle and choose the right solution. 

There are a wide range of payment options for online marketplaces available, which we’ll explore in a little bit.

What Are Some Benefits of Payments for Marketplaces?

Providing payment options on your marketplace, app, or ecosystem provides numerous benefits to all sides of the purchase equation – buyer, supplier, and platform (or in the case of apps and ecosystems, those who issue invoices and pay invoices in addition to the platform itself.)  

Meet buyer and supplier expectations

Nearly three quarters – 73 percent – of B2B buyers are aged 25 to 39. More than a third of those are the sole decision makers for their business. This group doesn’t want to handle B2B payments the traditional way, which is often through an emailed (or even snail mailed) invoice and a manual ACH transaction or mailed check. Marketplaces, portals, and apps are discovering that this generation wants – and expects – the speed and ease of digital payments, just as they do with B2C purchases in their personal lives.

Simplify operations

Marketplace payments also simplify operations, allowing you to onboard customers, process orders, and accept payments all within one platform. It also allows you to manage risk with one payment platform. The customer experience is streamlined as everything can be done in one place, without having to go offline. 

Drive revenue and stickiness

Having a payment gateway embedded within the online shopping experience helps increase follow through and stickiness. If a buyer has to go offline to handle payment, such as sending a check or wire transfer, it makes them less likely to complete the transaction. Including embedded finance also encourages buyers and supplier to keep using the platform for future transactions.

Grow globally

Having payments available on your marketplace allows you to grow globally, as you can easily let your customers make and accept payments in various currencies across multiple markets. A payment service provider takes care of the complexity of accepting and managing online payments.

Different Ways to Handle Payments for Marketplaces

Invoice funding

One of the biggest challenges for online marketplaces is the mismatched payment expectations of buyers and suppliers. Buyers want to take advantage of net terms (a way to buy now and pay later), while sellers want to sell now, collect now. Invoice funding is the only payment option for marketplaces that solves the problems of both buyers and suppliers, while still benefiting the platform. 

Not only that, but it provides a complete end-to-end solution that solves practically every problem involved with payments for online marketplaces. The way invoice financing works lends itself well to solving mismatched payment expectations. A supplier sells their invoices to an invoice financing company. The supplier receives cash for the invoice amount, usually less fees, ahead of the payment terms. The buyer pays the invoice amount to the invoice funding company (or to the platform, who then pays the invoice funding company) according to the original payment terms. The platform also gets paid quickly as a result.

Pros of Invoice Funding Payments

  • Buyers pay on net terms
  • Immediate and ongoing cash flow
  • Suppliers get paid immediately
  • Instant payouts for platforms
  • Seamless online transactions
  • Cash flow increases
  • Stickiness and value improves
  • Additional revenue stream
  • No collateral required
  • Improved customer relationships

Cons of Paying by Invoice Funding

  • Lack of control 
  • Relies on customer payment history


Traditionally, B2B payments have taken place offline, with check payments one of the more popular methods of payment. 

Pros of Check Payments

  • No convenience fees
  • Proof of payment
  • Convenient and easy to use
  • Less chance of scam

Cons of Paying by Check

  • Checks cost money
  • Processing time
  • Takes time to fill out
  • Not all merchants accept checks

Credit card

Credit card payments, such as Visa or American Express, are increasingly becoming more accepted as a popular payment method for B2B transactions online. Credit card payments are faster than check payments. 

Pros of Credit Card Payments

  • Ease of use
  • Rewards and points
  • Faster than check
  • Globally accepted

Cons of Paying by Credit Card

  • Increased risk of fraud
  • Chargebacks
  • High processing fees
  • Increases debt


B2B automated clearing house (ACH) payments allow businesses to provide payment in a direct, safe, and automated manner. Payments using ACH transfer the owed funds directly from one bank account to another. A bank transfer or wire transfer are just two types of ACH transactions. 

Pros of ACH Payments

  • Convenient
  • Easy to manage bulk payments
  • No credit required
  • Reduced physical payments
  • Lower fee than credit card

Cons of Paying by ACH

  • Limited overseas use
  • Not ideal for time-critical payments
  • Easy to mess up account information
  • Must have available funds


An E-Wallet, sometimes called a digital wallet, is another payment method which facilitates frictionless purchases and is becoming more accepted for B2B transactions, including mobile payments. It is a type of electronic debit card which is used for online B2B transactions, although debit payments themselves are still not very common for B2B transactions.

Pros of E-Wallet Payments

  • Easy to split payments between buyers and sellers
  • Integrate with deferred payment partners
  • Hold funds as required
  • Take commission at any time

Cons of Paying by E-Wallet

  • Not widely accepted
  • Ongoing service fees
  • Transaction fees

Buy now, pay later

Buy now, pay later meets the needs of buyers who want net terms, but it leaves suppliers and platforms on the hook for extending credit, which can affect their ability to cover expenses and go after growth opportunities. 

Pros of Buy Now, Pay Later Payments

  • Convenient for buyers
  • Often low cost financing
  • Good/high credit score not required
  • Fast approval 

Cons of Paying by Buy Now, Pay Later

  • Sellers/platform waiting to get paid
  • Missed payments carry high fees
  • Affects buyer credit if payments aren’t made
  • Lack of oversight

What to Look for in a Marketplace Payment Solution

When searching for the best payment processing solution for your marketplace, you’ll want to ask yourself a few key questions to determine the best fit. 

1. Do they have the technology in place?

When partnering with a marketplace payments company, you want to ensure they have the infrastructure in place to handle your business. Is there a process in place when it comes to fraud protection, and available tech expertise for the initial integration and in case of any future issues? 

2. Can they scale with you as you grow?

You ultimately want to grow your business to serve more customers, and any partners you bring on board should be able to meet those growth demands with you.  

3. Do they align with your values?

Getting involved in any relationship – including business – entails ensuring both parties have similar values. Those that see the most success take a partnership approach – where the payments partner works with you every step of the way, from the discovery call and onboarding process, right through to ensuring a seamless payment process. 

4. Do they have experience in your specific vertical?

Many businesses want to know that a payments partner has experience in their specific vertical. They also want to know that a payments provider has experience working with large buyers and their workflows, different types of platforms, and their technology.  

5. Do they have enough capital?

Ensure that any payments for marketplaces provider you’re looking to partner with has access to the capital required to meet your needs. They should also ask about whether or not there are any minimum or maximum funding amounts. 

6. Is it easy to integrate?

When looking for a payments solution, ease of integration is often top of mind. Many online marketplaces want a provider that works with their payment API and other infrastructure already in place, or offers a single integration. You want the integration process to be as seamless as possible, so that all sides of the buying and payment transaction have access to the terms and conditions they want.

Embedded Finance a Solution for Payments for Marketplaces

Embedding the invoice funding process into marketplaces, portals, and apps takes away their credit risk, but only if they have a partner to do their underwriting. In addition, embedded finance solutions are also important for making suppliers stick around the platforms, with increased transactions and opportunity to deepen their buyer relationships as a major incentive. Invoice financing as an embedded finance solution enables marketplaces to avoid the cumbersome requirements of becoming a fintech, while still reaping the benefits of payments within their experience.

Pros of Embedded Finance for Marketplace Payments

  • Can remove credit risk
  • Increases stickiness
  • Increased transactions
  • Deepens customer relationships
  • Buyers pay on net terms
  • Immediate and ongoing cash flow
  • Suppliers and platforms get paid immediately
  • Seamless online experience
  • Additional revenue stream

Cons of Embedded Finance for Marketplace Payments

  • Fees
  • Lack of control 
  • Relies on customer payment history

Embed FundThrough for Faster Payments

FundThrough’s invoice funding solution can be embedded into marketplace platforms of all kinds. While payments are causing pain for many marketplaces, portals, and apps, embedding instant invoice payments offers a convenient solution, while adding more value for buyers, suppliers, and platforms alike.

Explore fast payments with an experienced fintech

Interested in possibly embedding FundThrough in your platform? Let’s connect!