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MenuIs it possible to add money to the balance on the two-sided marketplace platform?
Based on the information and my understanding, most often the money on the two-sided marketplace goes directly to the seller's bank account (minus the fees of the provider) after the buyer received service/product.
Is it legally possible to add money to the balance so the seller can later buy someone else's service/product with the money he earned?
Image: http://s23.postimg.org/uug89unnv/two_sided_marketplace.jpg
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There are legal, regulatory and risk implications to retaining and handling funds as a marketplace.
The good thing is with marketplace platforms becoming more mainstream, the payment solutions ( such as Stripe, BrainTree, WePay etc) have also evolved to support their unique needs/services provided.
Depending upon your marketplace model you could choose to just transfer funds to the Seller minus your fees/commission OR hold onto funds (for a certain period) giving your users the ability to withdraw funds upon their choosing.
The payment solutions you choose vary by the use case, and the solution providers take responsibility for legal, regulatory and risk implications.
I have experience in payments for maketplaces and would be happy to share more feedback and suitable solutions over a call.


Yes, it is possible to add a balance feature to a two-sided marketplace. This feature allows users to deposit money into their marketplace accounts, which they can later use to pay for goods or services. Here’s how it typically works:
1. For Buyers/Service Seekers
Buyers can add money to their accounts in advance. This balance can then be used to pay for bookings, products, or services without the need for repeated transactions.
Use cases:
• Streamlined payments.
• Prepaid bookings or purchases.
2. For Sellers/Service Providers
Sellers can also use balance features for:
• Receiving payments directly into their marketplace account.
• Using the balance for subscription fees, promotions, or purchases within the platform.
Steps to Implement
1. Payment Gateway Integration
Implement trusted gateways (e.g., Stripe, PayPal) to enable users to deposit funds securely.
2. Digital Wallet System
Create a digital wallet where balances are displayed and transactions are tracked.
3. Transaction Rules
Define rules for adding, withdrawing, or holding balances. Example:
• Refund policies.
• Minimum withdrawal limits.
• Fees for transactions (if applicable).
4. Legal Compliance
Ensure compliance with financial regulations like KYC (Know Your Customer) and AML (Anti-Money Laundering), especially if handling user balances or payouts.
5. User Experience
• Provide clear options for balance top-ups.
• Offer transparency about deductions (e.g., service fees).
Would you like detailed recommendations for integrating this into your marketplace idea?
Related Questions
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Holding funds in a 2-sided marketplace?
Check out https://www.balancedpayments.com/ They are made for marketplaces. Airbnb CEO among others invested in them and they have some of the best pricing/payout fees. Also some good info on http://www.collaborativeconsumption.com/2013/10/08/online-marketplaces-are-hard/ One of Balanced Payments co-founders is writing this blog series on marketplaces.
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What is the best pricing (business model) to apply to a marketplace?
I like to separate your question into 2 sub-questions: #1 How do we determine which side to charge? #2 How much is the right amount to charge? On #1, my answer is that you can charge the side(s) for whom you add the most value. In your examples, Uber really solves a big problem for drivers, it's that they sit idle for a good part of the day, so are willing to pay a lot for new leads. (their alternative is no work) Consumers are charged more for the convenience of a private car but they are probably not so much willing to pay more for a taxi, even if they can hail one from their phones. For AirBnB, it's a mix, it's a way for landlords to monetize idle capacity which they are willing to pay for, but it's also a way for a renter to pay less than they would normally pay for a hotel. On #2 (how much), I like to triangulate a number of factors: - What's the maximum amount I can charge one side, while still being a good deal for them. - How much do I need to charge so that I can become profitable? (the economics are quite different if you charge 3% vs. 12%) - What are comparable services charging for substitutes/competitive offerings? I will just add that there is no formulaic way to determine pricing strategies (curated vs. open), and it's a lot more about what's the comparable and what the value delivered is. That's how I approached the question while deciding the business model at ProBueno.com (my startup)
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Freemium v.s. free trial for a marketplace?
It depends on a number of factors but I'd boil it down to two key things to start: 1) What is your real cost to provide a free plan or trial? 2) Who exactly is your customer and what are they used to paying and who and how do they pay today? When you say "online workforce marketplace" it sounds as though you're placing virtual workers. If that's the case, or if you're paying for the supply side of the marketplace, the question is how much can you subsidize demand? Depending on where you're at in the process, I'd also question how much you can learn about the viability of your marketplace by offering a free version, assuming again, that free is actually a real cost to you. I was part of a SaaS project that started charging people for early access based mostly on just a good landing page (we clearly stated they were pre-paying) and were amazed at the response. I've also run a SaaS product that offered free trials and realized that the support costs and hand-holding and selling required to convert from free trial to paid wasn't worth it, this despite the product's significant average ARR. You might be better off providing a "more information" sign-up form (to capture more leads) and let them ask for a free trial while only showing your paid options. I've been amazed at the lead capture potential from a simple "have questions? Click here and we'll contact you" This is all the generalized advice I can offer based on the limited information I have, but happy to dive-in further if you'd like on a call.
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How important is it for a marketplace startup to drive enough demand (customers) for your supply (sellers) to make a full time living off of it?
It's very important. (first, read this article by Josh Breinlinger - http://acrowdedspace.com/post/47647912203/a-critical-but-ignored-metric-for-marketplaces) The way you achieve success in a marketplace is by driving liquidity for both your supply & demand. Demand-side Liquidity = When users come to your marketplace, they can achieve their goals. Supply-side Liquidity = When supply comes to your marketplace they can achieve their goals... which are almost always to make money. If you're making a large amount of your supply-side users a full-time income, then you're helping them achieve liquidity. Now it's not so black and white and it doesn't always have to be a "full-time income." It depends what their goals are. E.g., 1) At Airbnb, renters aren't looking to quit their day jobs and become landlords full-time... they're just look to earn a substantial amount of income to offset their rent, mortgage, etc. So in this case, I would probably goal on # of renters that earn >$500 / month... and (in the first 1-5 years) try to grow this number by 10-20% MoM... and maybe by just 5% once you're in the mid-high tens of millions in yearly revenue. 2) At Kickstarter, the goal of the supply-side is to get their project successfully funded. They don't care if the project creator is "full-time"... they just want to make sure they meet their funding goal. This is why they talk about their 44% project success rate all the time - http://www.kickstarter.com/help/stats 3) At Udemy, our instructors want a substantial amount of their income to be driven from their Udemy course earnings... so we look at how many instructors are earning >$2k / month.
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Broad niche or Targeted niche which way to go?
I always suggest going "uncomfortably narrow" initially so that you can really dial in the user experience and build liquidity first. Going broad will be tougher as there's too much noise to signal. Also, it's best to fake the supply side initially of you can to improve the buyers side first, then figure out supply & quality afterwards if customers are buying and you've proven out a demand strategy that will work.