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Ask HN: Payment gateway for multi-vendor marketplace as an early stage startup?

13 points by pencablecoffee ↗ HN
I’m in the process of building a relatively typical e-commerce marketplace: vendor creates account, lists items, sells, platform takes a small fee. It focuses on a large and underserved market, a domain I know very well, and I’m excited to use it and share with the community.

I’m having trouble getting the payment piece sorted and I’d love to hear experiences and thoughts from anyone who’s been through this before.

My first choice for a payment gateway is PayPal, particularly the PayPal Commerce Marketplace. PayPal is already ubiquitous in the world that I work with. The sole large company who serves this space also uses it so it will make for an easier pitch to get folks to try my product. PPCP is a program within PayPal, the only on-ramp appears to be a form that you fill out and hope to hear back from someone. I spent all morning try to reach someone on the phone and struck out. I’ve been advised that they won’t talk to you at all if you don’t have a plan to reach $2M in the first year and an established business presence. I, a solo first-time founder (but no stranger to early stage startups), have neither a plan to reach that revenue immediately nor an established business to leverage. I’d like to focus on my product instead of pitching to PayPal.

Stripe Connect looks like the best alternative but it will make it harder for me to attract merchants. I’d need their Express product, which comes with additional fees. Their payout approach looks more expensive than PayPal and I’ve been told their merchant onboarding isn’t as pleasant.

Others? There’s Adyen, who I’m told won’t talk to anyone sub-Series A. Braintree seem to have closed their marketplace platform product in favor of PayPal’s. Square has limited support in Europe, where many of my merchants will be based.

I’m getting the impression that this is a domain that primarily wants the business of existing enterprises that are branching out, or maybe a certain type of startup that raises a lot of money before ever building anything. It’s frustrating and disheartening. My MVP is coming along, I plan on starting a small public trial soon, but I’m very concerned about the potential for this to derail me.

Anyone every build a company or product like this and run into these problems? Any advice, recommendations? I’d appreciate your help.

14 comments

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ryanjshaw
I too am looking into this for a platform I want to build and unfortunately all I can add is more bad news:

* Paddle is off the list because they don't do marketplaces (well they emailed me and said they might but it depends on the revenue split, which is sketchy to me)

* Mollie also has a "contact us" form and is likely a waste of time.

* Stripe Connect seems like the real deal, but if you're in an unsupported developing country like me (ZA) it comes with additional challenges I still haven't figured out i.e. while it's easy to establish a company in a country supported by Stripe, opening up a bank account without a flight to that country for KYC is basically impossible.

* Beware Stripe Atlas as a non-US citizen: owing a US company comes with very complicated legal obligations in all your future banking and tax dealings

Also, it's super annoying how every thread on HN about this has a majority of people who don't understand that marketplace/platform payment solutions are not the same as direct charge solutions.

pencablecoffee
I’m in a major US city and it seems extremely challenging to get this going, I’m sorry you’re going through an even more extreme version of it!

It’s so frustrating. For the longest time, I’ve been wondering why nobody comes with the elephant company that dominates my domain and I’m starting to think this is a big part of the answer. The system seems designed for established companies or folks with a lot of resources. Launching any startup is tough, this is something I worry tenacity and product engineering talent alone can’t get past.

nickfromseattle
> * Beware Stripe Atlas as a non-US citizen: owing a US company comes with very complicated legal obligations in all your future banking and tax dealings

I'm looking at adding a co-founder who is a non-US citizen.

Any more details here?

acoustic_shadow
Setting it up through Shopify and using Onport might be an option. It used to be a more reasonably price ($200 range) but it looks like it has raised their prices since Farfetch acquired them. https://onport.com
stcroixx
Just build it in a way you can swap a new one in without interrupting business and always have at least a couple alternatives live. They will 100% screw you at some point so that has to be planned for and designed into the system as well as the cost of maintaining multiple providers.
pencablecoffee
This is something I’m considering. I can go live with a single PayPal business account since initial users will be limited to a very small pool of testers. I can have PayPal Commerce Platform working via Sandbox account and ready to go and can do something similar for Stripe Connect. But I need to pick what gets my attention ruthlessly, especially so early, and I’d like to have one reliable partner early on so I can focus on the product.
decide1000
I have good experience with Mollie. Implemented it on several projects. Great support, clear docs and subscription management is managed from the API.
alex_c
You can use Stripe Connect with standard accounts.

The documentation (and asking support questions about Stripe Connect) is not very fun to navigate though.

coretx
I don't know the US market, but I do know the EU market. Here you can simply open ordinary business accounts with different banks. ( Costs not even a 100 a year ) All charge different prices for single transactions or batches of transactions. And more importantly, all allow for transactions to be send by their preferred format. Generally, their price goes down as your volume goes up. Let your system do the math ( Pick the right bank for the transaction ) and be your own payment gateway.
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