88% of Businesses Selling on Marketplaces Receive Payouts Through Them

When businesses sell their products on a digital marketplace, most are paid through the marketplace, according to “Marketplaces As Retail’s New Front Door,” a PYMNTS and Visa collaboration based on a survey of 1,049 small sellers.

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In fact, 88% of the surveyed businesses selling on marketplaces reported that they are paid through the marketplaces on which they display their listing. Only the remaining 12% said they are paid directly by the buyers.

The small- to medium-sized businesses (SMBs) in the PYMNTS study are the most likely of all to be paid via marketplaces, with 86% of small businesses and 100% of medium-sized businesses receiving payouts via marketplaces, respectively.

Waiting Several Days for Payment to Process

The number of digital marketplaces continues to grow, providing more options for both buyers and sellers.

See also: Yoox Debuts Online High-End Fashion Marketplace

The businesses selling on marketplaces are most often paid via automated clearing house (ACH) or debit card, both cited by 33% of these businesses, followed by digital wallet and check, both cited by 17% of such respondents.

The SMBs paid via marketplaces tend to receive their sales proceeds using payout methods that can take several days to fully process. Medium-sized businesses paid through marketplaces are most commonly paid via debit card and ACH, for example, with 43% and 36% being paid in these ways, respectively. Small businesses paid via marketplaces are also likely to be paid via ACH, with 35% reporting receiving payouts this way. The second- and third-most common ways small businesses receive payouts are via digital wallet and credit card, with 26% being paid via one of the two.

Many large businesses selling on digital marketplaces often have a very different payout experience. Large businesses in the PYMNTS study are the least likely of all size classes to be paid through the marketplaces they use, with 75% receiving payouts this way. Among those large businesses, most receive payouts via check or debit card as 44% are paid via check and 33% are paid via debit card.

Adding Value to Sellers

Digital marketplaces offering real-time settlement options can add value to sellers by allowing them to immediately access proceeds, stave off cash-flow shortages and keep their businesses afloat. This is true for businesses of all sizes across various industries.

Adding that value to sellers is important to marketplaces. The fact that digital marketplaces make it so easy to sign in and list products means that sellers can just as easily remove their listings and switch to a new marketplace with minimal effort. Marketplaces are thus left to compete against one another to grab new sellers’ attention and encourage them to stay with services and features that can help their businesses survive and thrive.

Real-time settlement is one such feature. Real-time settlement options not only present a solution to the current cash flow crisis so many SMBs are facing, but they also represent a multibillion-dollar opportunity for marketplaces willing to adopt them.