Best Credit Card Processors for Online Marketplaces

June 2, 2023

Online marketplace platforms wherein sellers and buyers come together to conduct commerce, such as Etsy and Zazzle, are becoming increasingly popular. However, this shift toward semi-professional peer-to-peer payments has outpaced much of the credit card processing industry's ability to provide easy-to-use, dependable merchant accounts for customers to pay the marketplace (“pay-in”) and for marketplaces to pay their vendors (“payout”). Simply put, there are only a handful of payment processors that offer payment solutions designed to integrate payments with marketplace platforms so that customers can pay for products and vendors can receive their funds in a seamless manner.

In an industry where so few solutions exist, it can be hard for online marketplaces to determine which payment processor is the best to integrate with their product. That's why we've compiled the following list of the best merchant accounts for marketplaces. The processors on this list offer services specifically designed for marketplace platforms, and they've also received positive merchant reviews for their pricing and customer service. In such a limited field of options, marketplace merchants should be sure to research each provider's pricing and terms of use before opting for a fully integrated partnership.

Our Picks for The Best Online Marketplace Payment Solutions

#1 Shopify

Shopify is a well-known e-commerce platform based in Ottawa, Ontario. Shopify is unlike the other providers on this list because it is combines both store creator that can be used to create an online marketplace and packages it with credit card processing services already built in and ready to go. Shopify users can turn their own stores into small-scale marketplaces using one of several apps from the Shopify app store. This means that merchants can create a store on the Shopify platform, purchase a single app, and gain the ability to offer sub-accounts for independent sellers while taking a commission from their sales. The two most popular apps for creating a marketplace in Shopify appear to be Marketplace by Bold and Multi Vendor Marketplace by Webkul.

For marketplace owners, Shopify offers different service packages at the following pricing tiers: $9/month (Lite), $29/month (Basic), $79/month (Standard), $299/month (Advanced), and a customized Plus plan for merchants who sell over a million dollars in merchandise per year. Online per-transaction fees decrease with each upgraded package, starting at 2.9% plus $0.30 for the Lite package and ending with a low custom rate for the Plus plan. Merchants can integrate their existing merchant accounts with Shopify, but they will pay an additional 2% per transaction on the Lite plan, an additional 1% per transaction on the Standard plan, and an additional 0.5% on the Advanced plan.

Overall, Shopify offers the most complete and easy way to both create an online marketplace, facilitate sales for vendors, take payments from customers, and then distribute those payments back to the sellers. We currently award Shopify an “A” rating in our in-depth review, and the Better Business Bureau gives the company an “A+” at this time.

For all the details regarding the company's marketplace payment options, visit the Shopify website here.

#2 Stripe

Founded in 2010, Stripe is an e-commerce processor that enables businesses to accept payments through their websites. As a more advanced option for businesses that require custom development, the company offers a service called “Stripe Connect” that is specifically intended for marketplace-style payments. In fact, this service currently powers large-scale marketplaces like Lyft, Kickstarter, and Instacart. Stripe Connect offers pay-in and payout, identity verification, tax reporting, payments in 25 countries and 100 currencies, in-app payments, custom statement descriptors, custom payout schedules, and instant fund routing.

Stripe Connect costs 2.9% plus $0.30 per transaction, which is charged to the marketplace before the payment gets disbursed to any vendors. For an additional 0.5%, marketplace owners can upgrade to managed accounts, which provide identity verification, custom branding, flexible payouts, local optimization, and reporting. Our review of Stripe currently gives the company a “B” rating, while the Better Business Bureau gives Stripe an “A+.”

#3 PayPal

PayPal is one of the largest payment processors in the world and was originally created to be the first large-scale online marketplace platform. PayPal offers marketplace payments to up to 250 vendors at once through its Mass Pay API. Like other PayPal products, this service disburses payments to PayPal accounts rather than bank accounts, although it is capable of accepting credit card payments.

PayPal is an easy-to-use service with a high profile and widespread acceptance. This recognition has enabled the company to grow and develop its product and service offerings, but it has also resulted in PayPal receiving a very large number of complaints related to customer service issues and fund holds. Our review of PayPal gives the company a “B” rating overall at this time, while the BBB gives PayPal an “A+.”

#4 Braintree Payments

Based in Chicago, Illinois, Braintree Payments (braintreepayments.com) is an excellent option for marketplaces due to its easily integrated plugin and fixed-rate, all-inclusive pricing. Braintree's products and services for marketplaces include tax management, flexible funding schedules, and sales reporting. Braintree Marketplace is comparable to Stripe Connect in terms of its application and scope.

Braintree charges marketplaces 2.9% plus $0.30 for all initial transactions made by sub-merchants, but it does not charge any fees for distributing payments to sub-merchants. Braintree utilizes First Data as its processing network but handles its accounts directly via phone and email support. The company is currently showing an “A” rating on our review and a “B+” rating with the Better Business Bureau.

#5 WePay

Founded in 2008, WePay is a payment processor that was originally created as a standard e-commerce merchant account provider, but has since shifted its full focus to its integrated, white-label payment service for enterprises and marketplace platforms. WePay specializes in serving marketplaces and crowdfunding platforms and offers simple seller onboarding, seamless checkout, customizable layouts, custom settlement schedules, fraud screening, transaction-level reporting, and mobile payment options for vendors. WePay is particularly active within the crowdfunding community, as it is the official partner of GoFundMe and YouCaring.

WePay no longer discloses its fees on its website, but it was previously known to charge 2.9% plus $0.30 per card transaction and 1% plus $0.30 per ACH transaction. Our review of WePay currently assigns it a “C” rating, while the Better Business Bureau gives WePay an “A.”

Final Thoughts

Choosing a credit card processor for an online marketplace requires consideration of several factors, such as feature breadth, ease of integration, pricing model, and quality of customer support. We chose solutions that support complex, multi-vendor transactions and handle international payments in multiple currencies. We also selected providers that offer the easiest solutions for implementation, whether that be custom development or full marketplace platform builders. We considered the pricing model carefully, especially in regards to volume discounts for large transaction quantities. Finally, reliable, responsive customer support was also a crucial weigh in our decision. Choosing from the processors above will set you up for smooth operations of your online marketplace.

About The Author

Phillip Parker

In the late 2000s, as a broke college student struggling to make ends meet, I was contacted by a merchant services company after uploading my resume to a job listings website. This company promised substantial commissions and ongoing residual income for simply persuading businesses to accept credit card payments. It seemed straightforward enough—after all, what business doesn’t need to process credit card payments? Following a phone interview with a persuasive “sales director,” I found myself embarking on what I believed would be an easy job that would significantly boost my bank account with reliable monthly income and large sales commissions. However, the lessons I learned would profoundly change my life in ways I could never have imagined.

After completing my sales training, I hit the ground running, eager to make sales. This broke college student was determined to improve his financial situation! My first attempt at a cold call, with no prior appointment, ended with a burly man in his 50s yelling at me to leave, claiming he had been “totally robbed” by someone like me before. As I hastily exited, puzzled and intimidated by his reaction, I couldn’t help but wonder what he meant. Throughout the day, I encountered similar hostility from other business owners, all expressing disdain for the industry I had been so excited to join that morning. Confused and curious, I decided to shift my approach from selling to listening.

I quickly uncovered that the merchant services sector was riddled with unethical practices, including hidden fees, deceptive marketing, fine-print traps, and much more. It dawned on me that I had nearly been tricked by a dubious company into selling overpriced services under contracts with long-term commitments, all without being fully aware of what I was promoting. Outraged, I resigned from that company but learned that there were indeed ethical credit card processing companies that treated their clients fairly. Over the next four years, I worked for one such company, assisting hundreds of businesses in securing cost-effective processing solutions. Yet, I also met many more who had been misled and trapped in onerous service agreements. Determined to help people steer clear of these unscrupulous providers, I launched this website in my spare time, dedicating myself to researching and sharing my findings on every merchant account provider I could investigate.

Gradually, more and more business owners began to discover my articles. As word spread, search engines started to rank my content highly, amplifying its reach. My efforts were making a difference! Eventually, the website garnered enough traffic to enable me to leave my job and focus on it full-time, a journey that has now spanned over a decade. This path has not been without its challenges; unscrupulous company owners have tried to intimidate and sue me into silence on several occasions. Yet, I have stood firm against each threat. Here I am, continuing to publish reviews and articles, hoping to safeguard others from the pitfalls of the credit card processing industry.

If you believe in my mission and wish to contribute, please share my articles on your websites and social media. Thank you for visiting!

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