The new rules of marketplace payouts
Marketplaces serve a critical function in aggregating products and serving as a singular place for the exchange of goods and services between buyers and sellers. It’s no surprise that they’re popular, and there are marketplaces for every kind of interaction, from luxury watches and collectible sneakers to odd jobs, travel, and used car parts. While these platforms provide access, they don’t always prioritize payments to sellers.
With the proliferation of online marketplaces, and with certain segments having multiple competitors, sellers have more choice than ever before. Sellers and providers of goods and services choose marketplaces based on a number of factors — with payouts as a key driver. They expect fast and flexible payout experiences. And these payout experiences are what drives retention and loyalty for a platform. The era of choice is here, and optimizing payouts opens the door to more sellers — and a better seller experience.
Debit and prepaid cards offer a powerful alternative to bank transfers and outdated payout methods.
The payout challenge in marketplace models
There’s good reason why marketplaces have stayed close to existing payment methods. For newcomers, online marketplaces are born of good ideas, but practicality and logistics can lag behind. For more mature marketplaces, established payment methods are often ingrained in systems, integrations and long-established processes. And, payments can be admin-heavy, with tax reporting, compliance and refund handling requiring ongoing diligence. Inertia sets in. As the old adage goes, “If it ain’t broke, don’t fix it.”
Across all marketplaces, sellers are often fragmented — and geographically distributed. Some earners are infrequent users, some occasional, and some rely on the marketplaces for their primary source of income. Sellers may require international transfers, robust KYC/KYB, and fraud prevention measures. Serving all of these groups is a challenge, with each expecting and accepting varying levels of payment frequency and types. And if the platform does not provide the expected payment, the seller moves to the next online marketplace.
Why cards work: Benefits for marketplaces
Speed: Instant or same-day access to funds
Flexibility: Use anywhere, online or in-store
Branded experience: Your marketplace stays top-of-wallet
Simplified operations: Funds disbursed to a card you control, with built-in limits, controls, and reporting
Engagement loop: Can be paired with rewards, promos, or rebates for seller loyalty
Use cases that make cards for payouts a no-brainer
Whether marketplaces are paying sellers, providers, consignors, freelancers or their own customers, branded cards are a seamless payment path. Amounts are funded by the marketplace and made immediately available to the recipients. These cards are issued by the marketplace — with no bank dependencies or delays — all funds and timing are controlled by the issuing marketplace.
Open-loop or closed-loop cards
When selected by the recipient, closed-loop cards are used to purchase from the marketplace, and bear no network fees. Sellers can opt to receive all or part of their payment via these cards, and the marketplace can provide an incentive for sellers to receive funds via closed-loop cards.
Open-loop cards can be used to purchase anything and carry interchange revenue with each transaction. These cards also have the advantage of not requiring any credit checks, so cardholders who may not qualify can use them for daily purchases. As with closed-loop cards, marketplaces can payout either a portion or all of the payment amounts via open-loop cards.
Just-in-time (JIT) funding vs. prefunded
This is where it gets interesting. When cards are used for seller/provider payouts or for customer refunds, the money stays with your company until the moment it is used. So, a $250 payout onto a debit card is incrementally removed from your company accounts as it is spent via the card. In the meantime, it earns interest for your business.
Refunds & cancellations: Better payments to customers
Cards are an exceptionally powerful way to refund customers for returns or cancellations, and can drive subsequent sales when funds are held for the next purchase. Like payouts, these cards can be open- or closed-loop, and can be loaded with incentives to keep funds circulating within the platform. Example: A customer on The RealReal returns shoes that are too small, and receives the full amount + a 10 percent bonus for taking the return via card. For many marketplaces, buyers are also sellers, so the funds stay with the marketplace longer.
Incentives, bonuses, or loyalty for power users
Cards are an attractive option to add earned rewards and bonuses. Instead of periodic increases via loyalty programs, branded cards can be loaded with funds to drive the next purchase. These additional rewards can be offset by either network savings or through interchange revenue across all cards.
There’s no devil in these details
Risk & compliance
From program design to implementation and launch, Alviere experts guide on the best — and fastest — path to success. That includes owning relationships with card networks, payout providers, and technology providers. The Alviere internal Risk & Compliance teams apply expertise to ensure a risk-free solution, managing all facets of compliance, risk management, and security. This includes full support for FDIC-insured accounts and rigorous compliance with Know Your Business (KYB) and Anti-Money Laundering (AML) standards. Additionally, Alviere assures robust fraud and identity management protocols and PCI & SOC 2 certifications to safeguard your business, allowing your customers to operate with confidence and peace of mind.
Own your brand and your customer data
By offering a co-branded debit program with Alviere, there are no additional third parties. Each Alviere client becomes the issuer, with all messaging and branding intact throughout the customer experience. So from the first ad to the final onboarding and use, your customers stay with you. As does their data. Every purchase and use of the card is your proprietary first-party data — not the bank’s.
It’s not just a card — it’s a competitive edge
With a plethora of options, the marketplaces that sellers turn to are the ones that make getting paid easy and fast. Offering more ways to collect earnings — including an accepted-anywhere card — gives your providers choices on how to collect their earnings.
Cards offer more than convenience — they offer control, connection, and new revenue streams. For smart marketplaces, adding cards delivers what your sellers want, making them come back time and again.
