Top marketplace payment providers in Australia: We compare 4!

Oct 20 2022
Business Payments Insights

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If you're scaling an Australian online marketplace, you might face challenges that other businesses don't, such as:

  • Create a process to split payments.

  • Enable both payins and payouts.

  • Design custom payment workflows.

As a marketplace, how you choose to process payments can influence every part of your business, including branding, growth, reputation, and internal operations – even the business model itself.

In this article, we break down:

Ready to take your marketplace payments to the next level? We are, too! Contact us now to see how we can create the payment infrastructure your platform deserves.

The top four marketplace payment providers in Australia

1. Zai

Since we’re the ones writing the article, we thought we'd start with ourselves.

Zai is a leading marketplace payment provider of tech-based payment solutions for tech-minded companies in Australia. Our main features are:

  • A suite of powerful APIs that enables our customers to connect to a broad ecosystem of payment tools while keeping software development and maintenance costs down.

  • A team of payment-tech experts that learn about your product and payment needs, then build a custom solution, based on our tools, made specifically for your platform.

  • More than a decade of operating in Australia, which gives us the local payment insights that help Australian marketplaces grow.

  • We’re a regulated entity that enables you to add secure payments and financial products to your online marketplace platform.

Thanks to our combined strengths, we’ve been able to help market-leading e-commerce platforms grow with a payment model that works for them. For example, we worked with Ordermentum – a leading B2B marketplace for the Australian hospitality industry – to help create payment solutions that would scale and grow with their company.

With Zai’s help, they were able to:

  • Provide their users with multiple payin and payout methods best suited to their individual business needs.

  • Create instant payments between users that optimise fresh food and beverage sales.

  • Let their restaurant and hotel customers top up their wallet accounts so they can make purchases at a moment’s notice.

  • Lower the fees for all participants (and boost margins) by consolidating their payment rails into one single online payment service.

Zai’s solutions can also work for gig economy platforms, which often have to deal with many moving pieces. All of these parts represent payment touch points, from service providers like restaurants to intermediaries such as tradies, or drivers, to end users.

Our tools can help these platforms improve their UX and product offering by:

  • Enabling end users to purchase services with the payment method they’re most comfortable with.

  • Automatically splitting those funds and segregating them into digital wallets for each service provider, so that vendors and providers can hold funds earned for services they’ve delivered.

  • Releasing the money once providers complete their tasks and all parties are satisfied.

  • Allowing the service provider to transfer their funds out to a bank account.

Here are the advantages marketplaces have by using Zai’s online payment gateway:

A payments API made for tech-minded marketplaces

We built our API with developers in mind so that they spend less time troubleshooting code and more time building great products. Our API reference guides and sandbox make it easy to test and deploy new product ideas.

When onboarding a new marketplace, we first sit down with your product and tech teams to learn the ins and outs of your payment needs.

From there, our experts get to work creating a payments orchestration solution built around your goals. Once you’re satisfied with our proposal, we collaborate with your tech team to get you up and running. After you’re launched, we’re there to support you so you can continue to grow.

Want to see the nuts and bolts of our API? Visit our documentation here.

Payment tools that add value to your marketplace at every step of the user journey

Zai’s payment tools don’t merely help your users move money in and out of your marketplace. Rather, they cover the entire journey your users make, including:

  • Holding funds so that your sellers can accumulate funds before paying out and your buyers can store them for future use.

  • Creating automatic payment orchestration that can instantly split payments and deliver funds to multiple parties.

  • Simplified reconciliation for both sellers and your in-house teams through wallets and our reporting dashboard.

  • Keeping everyone safe and reducing chargebacks through enhanced Know Your Customer (KYC), fraud protection anti-fraud checks.

The ability to accept the payment methods your users want

Our API acts as a single marketplace payment gateway to nearly every Australian payment option, including:

  • BPAY.

  • PayTo.

  • NPP real-time payments.

  • Debit & credit cards.

  • Wire transfer.

That way, your users can both pay in and pay out their funds in any payment method of their choosing, whether it be a global standard like payment cards or an Australian-specific one for bank transfers.

Real-time payments for time-sensitive marketplaces

Marketplaces are best when they’re the most liquid.

Zai’s payment infrastructure enables your users to transact with each other often in minutes so that funds change hands at the same time that goods and services do. This feature is especially useful for time-sensitive marketplaces like food wholesalers, ride-sharing platforms, and delivery apps.

In the future, Zai’s payment platform will include 3D Secure 2.0, Apple Pay® and Google Wallet®.

Who does Zai work best for?

Zai works best for:

  • Marketplaces with complex payment requirements, including multiple payment options and parties, like multi-vendor marketplaces.

  • Platforms that need to provide their users with a place to hold funds internally.

  • Fast-moving industries where transactions between providers and buyers need to clear instantly.

  • Companies needing bespoke marketplace payment solutions that other “out-of-the-box” alternatives can’t easily provide.

  • Innovative marketplace startups that want to disrupt the industry and create out-of-the-box solutions for their customers.

Zai may not be the best fit for non-tech marketplaces that have limited payment needs and are looking for simple payment gateways.

Zai is best suited for tech-focused marketplaces that have complex payment needs. While we’re happy to help smaller webshops that support physical retailers (and that primarily transact with payment cards), other marketplace payment providers might be a better fit for your webshop.

Have you seen enough and are ready to see how Zai can help you? Let’s chat! Contact us now to see how we can work together.

2. Stripe

Stripe Connect is one of the fastest-growing global marketplace payment providers. Present in multiple countries, the payments giant claims that you can be up and running within minutes through their API (although, in practice, that isn’t always the case).

Stripe Connect is probably a better fit for Australian marketplace businesses that are in the process of going global and want to get set up as quickly as possible. However, some notable trade-offs come with this extended geographical reach, such as:

  • High transaction fees.

  • Limited API flexibility (which can create a risk if your developers build a custom solution on top of it, only to see it break with an update).

  • The risk of being de-platformed after onboarding if Stripe believes your marketplace business is high risk or doesn’t fully comply with their terms.

Who are they good for? Marketplaces that want to get set up quickly and have plans to go global.

3. Novatti

Novatti is an Australian payments company aimed at helping brick-and-mortar businesses build an online sales channel. Because of that, it focuses more on the journey than the tech, which largely means translating the physical point-of-sale experience into an online one.

It shouldn’t be surprising then that accepting card payments is one of their main features.

For marketplace owners who are about to scale, this means foregoing features like split payments, multiple payment channels, and e-wallets.

Who are they good for? Marketplaces that want to help brick-and-mortar companies do business online.

4. Adyen

Like Stripe, Adyen is a global payment giant with a presence around the world. Unlike Stripe, which focuses on e-commerce, Ayden looks to unify the payment experience across all channels, both physical and online.

Their tools help merchants make point-of-sale (POS) payments more seamless through smarter terminals and mobile payment solutions, with credit and debit cards at its core. Their tech infrastructure is solid for these needs but can become difficult to scale once payment requirements become more complex.

Who are they good for? Like Novatti, Adyen is a better fit for companies looking to get into e-commerce but don’t have ambitions to provide marketplace functionality to third-party sellers.

Our top tips for choosing a marketplace payment service provider

Can’t decide which payment service provider is best for your marketplace? These questions can help inform and guide your research and lead to better decision making.

Does the payment provider understand how my marketplace works?

Googling “marketplace payment providers” will get a lot of results. However, many of the marketplace payment gateway companies that appear in the results don’t have the right products and services for complex payment solutions that growing marketplaces need.

It’s worth checking under the hood to see what services these payment processors can offer. Looking at the technical docs is a great starting point.

Does this provider accept our users’ preferred payment methods?

Card payments can get the job done, but it’s no secret that they aren’t a great fit for many marketplace owners. For one, credit card fees eat into valuable margins. Second, the long payment processing times are poorly suited to high-transaction business models.

It’s important to have the flexibility to give both your buyers and your sellers the payment tools they need to operate on your platform while protecting your bottom line.

How can this provider help me safely manage our worst-case scenarios?

It might not always be comfortable to do so, but reflecting on your business risks while looking for marketplace payment providers will help you make better decisions.

Some of the common risk assessment questions we’ve heard from our marketplace clients include:

  • What happens when a payment from a buyer goes through, but the product doesn’t arrive? Are you able to easily hold the funds or compensate the buyer? Or do you need to contact multiple financial entities to reverse the transaction?

  • What happens when someone wants a refund? If a buyer is unsatisfied with the product or service they purchased, they could be entitled to a refund. Getting that money back from the seller and into the buyer’s account is a huge part of the user experience. It can become detrimental to the marketplace's brand reputation if it takes too long or requires contacting multiple parties to recapture those funds.

Can this provider orchestrate the payment needs best suited for my marketplace?

Most marketplaces have complex payment needs, which only grow in complexity as the business grows. It’s important to ensure that whichever provider you choose can meet those needs both today and in the future.

What payment tasks can the provider handle that we’re currently doing in-house?

Whether it's your back-office, customer service, accounting or IT department, your employees’ time is incredibly valuable.

By outsourcing those tasks to your payment provider (either through consulting, tech, automation or a combination of all three), you can redeploy your talent pool to more value-driven activities. To do so, though, you need to select the top marketplace payment provider most suited to the task.

Can this provider scale with me or do I risk changing as we grow?

It’s often tempting to go with an easy short-term payment solution.

Yet, doing so often comes with a high cost later when your marketplace outgrows its payment tool. It’s helpful to sit down with your product strategists to see how your roadmap aligns with the payment provider you’re examining.

How well can our developers use the payment provider’s tech?

Ultimately, your developers will be the most exposed to the payment provider you work with since they’ll have to build around their infrastructure.

Depending on the needs of your marketplace, you’ll need either bespoke support from the provider or a unilateral build of your solution. In the case of the latter, if the provider pushes through an update, there’s a chance it could break your payment system, creating a massive headache for you in the process.

Why Zai is the right payments solution for your Australian marketplace

As one of the top marketplace payment providers, Zai has been helping some of the best-known Australian marketplaces grow and succeed for years. Our payment solutions give online marketplaces like yours the flexibility to build your platform the way you want, and not build it around your payment providers' pre-defined rules.

We’re ready to help you build your own payment infrastructure to be successful from the ground up. Contact us today to speak with one of our payment experts to see how we can create the payment solution your platform deserves.

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