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Payment infrastructure for marketplaces and platforms: who is the merchant, who holds the money, who pays the sellers
TL;DR. A marketplace is not a merchant with extra steps. Before pricing, before methods, before anything, three questions decide the stack: who is the merchant of record, who holds the buyers' money between purchase and payout, and who carries the disputes. There are three answers (a registered marketplace, a payment facilitator, or sellers as merchants with a licensed PSP splitting the money), and each comes with its own scheme rules, licensing line, seller thresholds and economics. Many platforms drifted into one of them as they grew. We put the model on paper first, then build the acquiring, payouts and routing that fit it.
Who this is for. Marketplaces and platforms processing $100K+ a month on behalf of sellers, with multi-entity settlement, cross-border sellers or buyers, or a model that was never formally chosen.
Who is the merchant, who holds the money, who pays the sellers.
Registered marketplace
The platform is the merchant of record. Visa registers it (written approval, annual recertification), card-absent only, receipt in the platform's name, settlement to the platform, which pays sellers. Financially liable for every dispute. May not carry high-brand-risk retailers. Multi-category: MCC 5262.
Payment facilitator
Sellers are sponsored merchants of the platform, contracted on the acquirer's behalf. The acquirer settles to the facilitator, which pays sellers on. Registration with the acquirer and the schemes; sellers above US$1M (Visa) or US$10M (Mastercard) a year must sign directly with the acquirer, with exemptions.
Sellers as merchants, PSP splits
Each seller is boarded as a merchant of a licensed PSP or acquirer. The platform never possesses or controls funds; the PSP splits each payment and pays out. Disputes land on the seller. The model that keeps a European platform outside the licensing line.
Scheme rules summarised from Visa's published payment facilitator and marketplace risk guide and processor summaries of the Visa and Mastercard rules; the rulebooks and your acquirer's agreement govern. Licensing advice is for your regulatory counsel.
Touch the money for both sides, and you are a payment institution.
PSD2's commercial agent exemption covers a platform that acts for one side only: the buyer or the seller. A marketplace that acts for both, which is what a marketplace is, stays outside licensing only if it never possesses or controls the funds. The moment buyer money sits in the platform's own account before sellers are paid, the platform is providing a payment service.
PSD3 and the Payment Services Regulation, still in negotiation in 2026, narrow the exemption further and state that platforms acting for both buyers and sellers are not commercial agents. The practical choices are the same today as after: hold a payment licence, or structure the stack so a licensed PSP holds and splits the funds and the platform never does. We structure the second.
Four patterns we see in marketplaces and platforms.
01
A model nobody chose.
The platform started as a merchant with a few sellers, grew, and now collects buyer money before delivery and pays sellers from its own account, relying on the commercial agent exclusion because its terms say the buyer's payment settles the debt. The EBA has answered that exact pattern: settlement of the payer's debt does not by itself take a platform outside PSD2, and the exclusion only covers a platform acting for the seller alone. It is also a marketplace by Visa's definition, unregistered. The acquirer finds out at the next review.
02
Thin seller onboarding.
Sellers added with an email and a bank account. Visa holds the acquirer responsible for all acts and omissions of its facilitators and marketplaces, and treats a seller's acts as the facilitator's, so the acquirer prices the platform on the worst seller it cannot see: short acquirer list, high reserve, every dispute a surprise. Visa's own guide requires seller authentication, principal background checks, screening for transaction laundering and continuous per-seller monitoring; build onboarding to that standard and the whole stack prices better.
03
The seller that outgrew the model.
One seller crosses US$1 million a year on Visa. Under the facilitator rules it must sign directly with the acquirer; under the marketplace rules it may exceed Visa's retailer volume limits. Nobody tracked it, and the registration is now the problem.
04
Payouts as an afterthought.
Settlement in one currency, payouts in several, converted at whatever rate the settlement provider applies, on a schedule that ignores the dispute window (120 days for most disputes under Visa rules, up to 540 for some). Every conversion is a cost nobody put on the P&L, and a platform that pays sellers in advance of delivery is carrying the dispute risk itself, which Visa's guide says to evaluate closely.
Model first. Then acquiring, payouts, routing.
Diagnose
Funds flow as it actually runs: who collects, who holds, who pays out, in which entities and currencies. Model against scheme rules and the licensing line. Seller volumes against the US$1M / US$10M thresholds. Seller onboarding against acquirer standards. Dispute liability and reserve. Cost per transaction and per payout.
Improve
Put the model on paper and fix what does not fit it: registration, entity structure, where the funds sit. Board with the acquirer or PSP that supports the model and the footprint. Build payouts on local rails in the currencies sellers spend. Add a second acquirer for the buyer side.
Prove
Move a bounded share of sellers or markets to the new structure. Measure approval, cost per transaction, payout cost and timing, dispute ratio and reserve against the baseline. Expand as the data earns it.
The marketplace underwriting file.
The acquirer underwrites the platform and, through it, every seller. These are the documents that decide which model you can register for and on what terms.
- Funds-flow diagram: who collects, who holds, who pays out, with entities, accounts and currencies
- Which model you are registering for, and the licence or licensed PSP that covers the funds
- Seller onboarding policy: KYC, ownership, what is sold, where, prohibited categories
- Seller list with annual volume by scheme, flagged against the US$1M and US$10M lines
- Dispute and refund policy between buyers and sellers, and who is liable at each step
- Payout schedule, rails and currencies; holds against the dispute window
- Six months of volume, chargeback and fraud ratios by month, by seller category and by country
What are the three ways a marketplace can take payments?
One: the marketplace is the merchant. Visa registers it as a Marketplace, it is the merchant of record, the receipt is in its name, it receives settlement and pays the sellers, and it is financially liable for every dispute. Two: the marketplace is a payment facilitator. Sellers are its sponsored merchants, it contracts with them on the acquirer's behalf, the acquirer settles to it and it pays them on. Three: the sellers are the merchants and a licensed PSP does the splitting. Each seller is boarded as a merchant of the PSP or acquirer; the platform never touches the money; the PSP splits each payment and pays out. Which one you are decides your licensing, your liability and your economics, and most platforms drifted into one without choosing it.
What does Visa require of a registered marketplace?
Per Visa's payment facilitator and marketplace risk guide: a marketplace brings buyers and retailers together on a single marketplace-branded platform, processes card-absent transactions only, is the merchant of record, issues the receipt in its own name, administers refunds and disputes between buyers and retailers, and is financially liable for all disputes. The acquirer registers it only after Visa's written approval and must recertify annually. It may not solicit high-brand-risk retailers, and retailers that exceed Visa's purchase volume limits must be signed directly. A multi-category marketplace uses MCC 5262.
When does a seller have to sign directly with the acquirer?
Under Visa's payment facilitator rules, once a sponsored merchant exceeds US$1 million in annual Visa volume: new ones before they process, existing ones within two years of crossing it, with exemptions for established facilitators under acquirer oversight and for certain MCCs. Mastercard's line is US$10 million in combined Mastercard and Maestro volume, raised from US$1 million in its 2024 rules, unless the facilitator meets a set of registration and monitoring conditions. Visa's marketplace model has its own volume limits for retailers. Any platform with large sellers needs to know where each one stands against these lines.
Do we need a payment licence in Europe?
Under PSD2, the commercial agent exemption only covers a platform that acts for one side, the payer or the payee. A marketplace acting for both can avoid licensing only if it never possesses or controls the funds, which in practice means a licensed PSP holds and splits them. PSD3 and the Payment Services Regulation, still being negotiated in 2026, narrow the exemption further and say outright that platforms acting for both buyers and sellers are not commercial agents. If your platform receives buyer money and pays sellers from its own account, you are either licensed or exposed.
Who carries the chargebacks?
In the marketplace model, the marketplace: Visa makes it financially liable for all disputes and expects it to run refunds and disputes between buyers and sellers. In the payment facilitator model, the facilitator is liable to the acquirer and recovers from the seller if it can. In the split-payments model, the seller is the merchant and the dispute lands on the seller, with the PSP's rules on holding payouts against it. The model you are in decides who is holding the bag; the reserve the acquirer asks for follows from that.
How should seller payouts work?
On the rail the seller can receive on, in the currency it spends, on a schedule that reflects dispute exposure. Local bank rails domestically, with holds that match the dispute window (120 days for most Visa disputes, up to 540 for some) for new or high-dispute sellers; Visa's guide expects facilitators and marketplaces to be able to suspend a seller's settlement during an investigation and divert funds to a reserve where a loss is likely. Multi-currency payouts are where margin leaks: settling in one currency and paying out in another at the provider's conversion rate is a cost per payout that rarely appears on the P&L. Design payouts as part of the stack, not as a treasury task afterwards.
What does seller onboarding have to do with payments?
Everything. The acquirer or PSP underwrites each seller: identity, ownership, what is sold, where. A platform with thin seller KYC gets a thin acquirer list, high reserves and a short life, because the acquirer is pricing the worst seller it cannot see. Build onboarding to the acquirer's standard from the start and the whole stack prices better.
Which categories can a marketplace not carry?
Under Visa's rules a registered marketplace may not solicit high-brand-risk retailers, and franchises and travel agents are ineligible as retailers. A marketplace that wants a high-risk category in its mix needs a different structure for that part: a separate entity, a facilitator registered for the category, or the sellers boarded directly. Mixing it into the marketplace registration puts the registration at risk.
How is Milestone paid for this?
By the acquirer or PSP you end up using, as a commission on volume. No fee to the platform for the review. We place with whichever of ~30 providers fits your model and footprint, so we have no reason to push one.
E-commerce
What a merchant at $100K+ a month should get from its acquirer.
Cross-border retail
Local acquiring across many markets under one stack.
Multi-rail
A second path for the buyer side without ripping out the primary.
Send us your funds flow.
A one-page diagram of who collects, holds and pays out, plus seller count and monthly volume. We tell you within one business day which model you are in, whether it is registered and licensed the way it needs to be, and which providers fit it. No fee for the review.