Average Marketplace Seller Waits 3.3 Days to Get Paid

Many small sellers rely on digital marketplaces to stay afloat. Still, they face an ongoing challenge when it comes to promptly receiving the sales proceeds they generate.

In fact, businesses that sell via digital marketplaces wait an average of 3.3 days to receive sales proceeds in their bank accounts, according to “Marketplaces as Retail’s New Front Door,” a PYMNTS and Visa collaboration based on a survey of 1,049 businesses and individuals selling physical products on digital marketplaces.

Get the report: Marketplaces as Retail’s New Front Door

The degree to which sellers must deal with this problem varies depending on the size of the seller in question, with the largest businesses being paid slowest of all. Large businesses earning more than $1 million wait 3.5 days, medium-sized businesses earning $500,000 to $1 million wait 3 days, and small businesses earning less than $500,000 wait 3.4 days.

Using Payment Methods That Can Take Several Days

In the consumer space, meanwhile, three times as many consumers received instant payments in 2021 than in 2020.

Read more: Payments 2022 Will Be All About Simplification

Most businesses selling on marketplaces are paid through the marketplaces on which they display their listings. That’s especially true of those in the two smaller categories, collectively referred to as small- to medium-sized businesses (SMBs).

The SMBs that are 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 automated clearinghouse (ACH).

SMBs paid via marketplaces are also likely to be paid via ACH. The second- and third-most common ways in which these SMBs receive payouts are via digital wallet and debit card.

Many large businesses selling on digital marketplaces often have a very different payout experience. Large businesses are the least likely of all size classes to be paid through the marketplaces they use. Among those large businesses, most receive payouts via check or debit card.

Gaining a Competitive Advantage With Real-Time Settlement

Large business sellers, which often wait the longest to get paid, are also the most interested in real-time settlement. Fewer SMB marketplace sellers express the same level of interest, but the share that do is still significant.

Not only are marketplace sellers interested in real-time settlement, but most businesses would also be willing to switch marketplaces if it meant getting paid faster.

Large businesses are the most interested in switching to marketplaces that offer real-time settlement options, but half of medium-sized businesses and just over half of small businesses are “somewhat” to “extremely” interested in switching marketplaces for real-time payouts.

This interest in switching marketplaces for real-time settlement options signals an opportunity for marketplaces to adopt real-time settlement as a method of attracting new sellers looking for faster, smoother ways to receive sales proceeds. Conversely, marketplaces that do not offer real-time payouts risk losing their sales.

Marketplace sellers have many options for listing their products. Marketplaces are thus left to compete amongst one another to grab new sellers’ attention and encourage them to stay with services and features that can help their businesses survive and thrive — and real-time settlement is one such feature.

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.