31 August 2022
To answer buyer practices, marketplaces must equip themselves with a certain number of essential functionalities. Among them is the variety of payment methods. In B2B, as in B2C, purchases are made by credit card, bank transfer or direct debit. As a marketplace operator, you need to cover as many practices as possible and adopt a recurring mode to facilitate bank transactions. But how does recurring payment allow you to manage your marketplace well?
The marketplace, whether B2B or B2C, is the site of a tripartite relationship: the marketplace operator acts as an intermediary in the transaction between the final buyer and the seller. Therefore, two transactional relationships can be distinguished:
In both cases, all calls for funds are initiated by the marketplace operator.
Recurrence can be by credit card or by direct debit. While buyers on B2C marketplaces tend to pay by credit card, those on B2B marketplaces prefer direct debit. However, B2B marketplaces increasingly tend to offer both methods to provide more payment flexibility.
In concrete terms, implementing recurrence on a credit card payment requires an initial registration of the card with a certain amount and then a 3DS-V2 verification by the operator. The marketplace operator then recalls the card, only for this same amount, according to a periodicity planned initially. It should be noted that Lemonway facilitates the registration of bank cards and allows them to be recalled for given amounts.
What are the advantages of providing recurring payments on your marketplace?
There are many advantages to direct debit or credit card registration:
It should be noted, however, that these payment methods require that the payers communicate their bank details to the marketplace and notify their bank so that the direct debits can be carried out without any problems.
As a PSP, Lemonway manages direct debits from accounts in the SEPA zone (Single Euro Payments Area). A distinction must be made between the classic SEPA mandate, known as the SDD core mandate for private individuals, and the SDD B2B mandate dedicated explicitly to business-to-business relations.
In both cases, the payer (the seller or the marketplace customer, depending on the relationship concerned) must sign the mandate and agree to the terms and conditions. For the core SDD mandate, the marketplace operator is responsible for registering the mandate, whereas the B2B SDD mandate must be provided to the payer’s bank before the first DD. In both schemes, Lemonway issues direct debit orders and submits them for debiting to the seller’s or end-buyer’s account with their prior agreement.
To help you maximise your conversion rates, Lemonway covers the main recurring payment methods. As a payment institution with passports in 30 countries, Lemonway offers you dedicated and personalised support to identify and implement the most suitable payment methods for your B2B or B2C marketplace project. Contact us now!
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