When you create a marketplace, there are 3 different ways for you to provide payment services on your platform: become registered as a payment institution, qualify for a license exemption or use a Payment Service Provider (PSP). The latter solution, which is both flexible and secure, is the most popular amongst marketplaces. Let’s find out why.
1. The simplicity of a turnkey solution
Launching a marketplace requires finding a payment solution that is both simple to set up and secure. It is not only an essential condition for the success of your platform, but also a way to facilitate your organisation. Thus, when choosing a registered company to offer online payment services, you are releasing yourself from various tasks, such as:
- Setting up the payment interface for buyers ;
- Collecting payments ;
- Controlling funds ;
- Transferring funds to merchants.
You are therefore saving some precious time to focus on the commercial development of your marketplace. Besides, the use of a PSP comes with a wide range of payment methods, which will be an additional argument for your customers:
- Simple payment;
- Deferred payment ;
- Payment in installments ;
- Payment by subscription.
In the same way, you can offer several international means of payment : credit card, bank transfer, direct debit ; or local means of payment : check, iDeal, etc…With all these payment options and features, you provide buyers and merchants with a user-friendly solution that makes their use of the website easier.
2. The guarantee to meet regulatory compliance requirements
Whether in France, in Europe or internationally, regulations on transactions are being increasingly regulated. Among other things, those aim at improving the control of payments made online and on marketplaces. If you go ahead and start managing financial cash flows, you are risking a failure to comply not only with the Monetary and Financial Code, but also with global regulations if you wish to expand abroad. By using a PSP, you automatically entrust it with the management of your payments and compliance controls. The PSP may be a credit institution (bank) or a payment institution. In all cases, it holds an authorisation issued by the ACPR (the Prudential Supervision and Resolution Authority, which operates under the auspices of the Banque de France). The benefits of this are as follows:
- To avoid the application process with the ACPR: long and tedious, those applications are not systematically granted
- To accompany you in all legal obligations: directives regarding money laundering and terrorism funding (LCB-FT), useful tools for carrying out « Know Your Customer » (KYC) and « Know Your Business » (KYB) processes. At Lemonway for instance, the KYC process can be immediate for individuals and semi-automated for corporate bodies.
A PSP addresses the problem of a marketplace that would like to provide payment services itself. The PSP registers the marketplace with a local regulator, as a payment agent. In this way, it does not become a payment institution. Here again, it is therefore possible to delegate its cashflow management.