Many small sellers rely on digital marketplaces to stay afloat. Yet they face an ongoing challenge when it comes to quickly receiving the proceeds from the sales they generate.
In fact, businesses that sell through digital marketplaces wait an average of 3.3 days to receive sales proceeds in their bank accounts, according to Marketplaces as Retail’s New Front Door, a PYMNTS and Visa collaboration based on a survey of 1,049 businesses and individuals selling physical products on digital marketplaces.
Get the report: Marketplaces as a new gateway to retail
The extent to which sellers have to deal with this issue varies depending on the size of the seller in question, with larger companies being the slowest to pay. Large companies earning more than $1 million wait 3.5 days, medium companies earning between $500,000 and $1 million wait 3 days, and small companies earning less than $500,000 wait 3.4 days.
Use payment methods that can take several days
In the consumer space, three times as many consumers received instant payments in 2021 than in 2020.
Read more: 2022 payments will be entirely focused on simplification
Most businesses that sell on marketplaces get paid through the marketplaces they display their ads on. This is especially true for people in the two smaller categories, collectively known as small and medium-sized enterprises (SMEs).
SMBs that are paid through marketplaces tend to receive their sales proceeds using payment methods that can take several days to fully process. Midsize businesses paid through marketplaces are most often paid by debit card and automated clearing house (ACH).
SMBs paid through marketplaces are also likely to be paid through ACH. The second and third most common ways these SMBs receive payments are through a digital wallet and debit card.
Many large companies that sell on digital marketplaces often have a very different checkout experience. Of all the size categories, large companies are the least likely to be paid through the marketplaces they use. Of these large companies, most receive payment by check or debit card.
Gain a competitive advantage with real-time settlement
Salespeople at large companies, who often wait the longest to get paid, are also the most interested in real-time settlement. Fewer sellers in the SME market are expressing the same level of interest, but the share that does is still significant.
Not only are marketplace sellers interested in real-time settlement, but most businesses would also be willing to switch marketplaces if it meant getting paid faster.
Large companies are most interested in moving to marketplaces that offer real-time settlement options, but half of medium-sized companies and just over half of small companies are “somewhat” to “extremely » Interested in switching marketplaces for real-time payments.
This interest in switching marketplaces for real-time settlement options signals an opportunity for marketplaces to embrace real-time settlement as a method to attract new sellers looking for faster and smoother ways to receive proceeds from sales. Conversely, marketplaces that do not offer real-time payments risk losing sales.
Marketplace sellers have many options for listing their products. Marketplaces therefore need to compete to attract the attention of new sellers and encourage them to stay with services and features that can help their businesses survive and thrive – and real-time settlement is one of them. these features.
Offering real-time settlement options can add value to sellers by giving them immediate access to product, avoiding cash shortages, and keeping their business afloat.