Why do marketplaces pay the sellers in 30 days?

by Marketing Team

marketplace payment , marketplace sellers

Why do marketplaces pay the sellers in 30 days?

by Marketing Team

The marketplaces are online sales platforms on which customers quickly find sellers. And yet, the sellers typically have to wait up to 30 days to receive their payments. How can this long wait be explained and what are the different stages and rules to be followed by marketplaces in terms of payment? Here is the explanation you were looking for:

 

Marketplace payment in 30 days: obligations vis-à-vis the law

The marketplaces act as intermediaries between buyers and sellers. They must request authorization from the ACPR (Prudential Control and Resolution Authority) to settle payments. 

Mainly reserved for banks and financial players, it is necessary to set up a payment institution (EP) authorization application file. This process is at the same time complex, time-consuming and expensive. It is especially suitable for large marketplaces like Amazon or eBay

To pay sellers, most marketplaces therefore prefer to cooperate with approved secure payment platforms. This allows them to continue their intermediary activity without directly managing the settlement of sellers' accounts. 

To do this, marketplaces rely on the principle of collection on behalf of third parties. This is the reason why payment terms can take up to 30 days after the sale of a product.

 

A need to properly manage fees and commissions 

The payment management by marketplaces is a fairly complex task. Apart from selling and shipping products, they are responsible for converting currencies and associated costs. 

First, marketplaces are required to verify that buyers have paid their payments. Then, they must make sure that no refund process is in progress on the seller's side. In some cases, they even have to pay sellers on different accounts, extending this step further. 

In addition, the taxes and commission rates applied are specific for each sale made. On Amazon for example, the payment period takes 14 days after the sale of a product. This deadline can be up to 30 days on other e-commerce platforms .

 

Different payment systems depending on the marketplaces

The marketplaces choose different payment solutions to settle accounts of the sellers. Some do the billing themselves, which takes a lot more time. Others prefer to delegate it to a third party. In any case, they must first acquire the payment orders before disbursing the money. 

To avoid waiting 30 days, most marketplace sellers choose to sign up for early payment service provider in order to get paid faster. 

One of the best early marketplace payment solution provider is C2 Capital. 

C2 Capital is able to make payments to sellers on D + 2 meaning in just 2 days. To take advantage of this specialized service, you must register online and log into a seller account. After completing all the required information, you will be able to benefit from an expedited payment method. 

 

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Tags: marketplace payment marketplace sellers