Why leading marketplaces are rethinking payments from the ground up

Key takeaways

• Marketplaces have evolved into global ecosystems, driven by mobile tech, digital behaviours, and growing demand for convenience.

• Embedded finance is helping marketplaces overcome complex payment challenges and unlock long-term value.

• Airwallex gives marketplaces the tools to go further, faster, and build scalable financial ecosystems from day one.

Think about your day. You might book a ride to work, order lunch through an app, or browse for something on Etsy or Amazon. Behind every one of those experiences is a marketplace, and behind every marketplace is a payment.

Marketplaces have evolved far beyond online retail, expanding into services, experiences, and community-led platforms. Today, they power everything from gig work and travel to digital content and niche communities. In fact, 67% of global eCommerce sales now take place on marketplaces¹. As mobile tech and buyer behaviour shift, platforms are under pressure to meet new expectations.

Payments sit at the heart of every marketplace interaction. They drive loyalty, speed up growth, and reduce complexity behind the scenes. On the flip side, if they’re not running smoothly, they frustrate buyers, erode seller trust, and stall expansion.

Challenges of traditional payments

Despite their ubiquity, marketplaces are complex beasts. They sit at the centre of a tangled web of buyers, sellers, payments, and regulations, each with its own set of pressures. And in compiling our latest report Beyond payments: How embedded finance is shaping the future of marketplaces we heard these pain points straight from those on the front lines. The main challenges included:

Fragmented systems create operational drag

Most marketplaces rely on multiple third-party vendors to manage payments, payouts, and currency conversion. As platforms scale, these disconnected systems become harder to maintain, making it difficult to offer a consistent experience across markets. Internal teams are left juggling providers, reconciling mismatched data, and managing seller expectations without the tools to do it well.

• Currency conversion eats into seller margins: Cross-border sales come with costs, and FX fees are often one of the biggest. Many marketplaces still rely on payment infrastructure that passes those costs directly to sellers. This not only reduces their earnings but also impacts platform loyalty, especially in price-sensitive categories.

• Compliance slows down expansion: Every region brings new rules and staying on top of them all is a huge undertaking for teams. Without built-in tools to manage KYC, AML, and regulatory reporting, compliance quickly becomes a blocker to growth. Teams face longer onboarding times, manual document reviews, and increasing pressure to stay audit-ready across jurisdictions.

The rise of embedded payments (and why it matters now)

API-first platforms and low-code tools have gone a long way towards reducing the complexity of setting up and scaling a marketplace. That shift has opened the door for embedded payments to become the norm, giving platforms more control and flexibility than ever before.

In the report, leaders at global marketplaces shared how embedded finance is helping them create better experiences for both buyers and sellers. Specifically:

• Increasing conversions with embedded checkouts: When buyers stay on-platform and pay in just a few taps, conversion rates jump. Accelerated checkout options like Shop Pay have shown lifts of up to 50% compared to guest checkout².

• Real-time payouts build trust: Waiting days to get paid is still a reality for many sellers. Embedded payment flows make it possible to offer faster, more transparent payouts, which helps keep sellers loyal and engaged.

• More local methods, fewer currency headaches: Whether buyers prefer cards, wallets, BNPL, or local methods like Alipay or Venmo, embedded payments let marketplaces support them all. They can settle in multiple currencies, reduce FX costs, and improve the experience for global users.

• Smarter compliance from day one: KYC, AML, fraud checks, and reporting are no longer blockers. Embedded payments increasingly come with compliance features built in, helping them stay ahead of regulatory demands without slowing things down.

Where marketplaces go next

Beyond payments: How embedded finance is shaping the future of marketplaces features insights from senior marketplace leaders who are already building what’s next. It explores how embedded finance is helping platforms improve buyer and seller experience, drive retention, and unlock new revenue streams far beyond payments.

As well as solving operational challenges, these marketplaces are creating full financial ecosystems that support sellers end to end. With multi-currency wallets, lending tools, and branded card issuing built in, platforms can give sellers better control, faster growth, and fewer reasons to leave.

More than 8 in 10 sellers say they want access to these kinds of services directly through the marketplace³. The demand is real. So is the opportunity to act now.

If you want to see how global platforms are doing it, and what that could look like for your business, the full report is your next step.

Sources:

1.  Khaled Tawfik, Tanmay Jain, Ali Harcourt, and Ammaarah Subjally, ‘The rise of the B2C specialty marketplace,’ Boston Consulting Group, 2024.

2.  ‘Scaling embedded finance: your enterprise guide to success’, Airwallex, in partnership with Newton X, 2024.

3.  ‘Embedded finance report: the opportunity for software platforms and marketplaces,’ Airwallex, in partnership with Edgar, Dunn & Company, 2023.