Why Marketplaces Are Turning Their Attention to Sellers

When Sultan Mehmed II built a covered market in Constantinople in 1455, he was betting that merchants would travel great distances if they knew customers would be waiting. The Grand Bazaar still stands today as proof that the marketplace model works. But the mechanics of keeping that model alive have shifted: the most consequential changes in digital marketplaces now center on the people selling, not just the people buying.

Marketplaces account for roughly half of all online transactions and trillions of dollars in value each year. Stripe, which provides financial infrastructure for 75 of the top 100 digital marketplaces, sees three recurring incentives that platforms use to attract and retain sellers: access to a global customer base, seamless onboarding, and embedded financial tools such as loans and spend cards.

Global Reach as a Retention Tool

Expanding into new countries is one of the hardest problems a marketplace can tackle. A 2022 study in the Journal of Business Research cited varying tax codes and compliance requirements as one of the three main barriers to globalizing a digital platform. Marketplaces that clear those hurdles give sellers something they can't easily get elsewhere: buyers in new markets.

GitHub used Stripe Connect to launch its Sponsors program, which pays developers for open-source contributions. Connect helped GitHub double its payout coverage to 68 countries, including Brazil, Indonesia, and India, moving thousands of developers off the waitlist in the process.

Onboarding That Doesn't Get in the Way

Seller onboarding is more than a formality. Because compliance requirements vary by geography and by the type of goods or services traded, a clunky onboarding flow can turn away sellers before they ever make a sale.

Stripe built Connect's onboarding with two principles in mind: onboarding is part of the customer experience and should minimize drop-off by collecting the right information at the right time, and flows should automatically adapt to local languages and requirements so marketplaces don't have to manage that complexity themselves. Connect's prebuilt, hosted, and embedded onboarding flows handle identity verification, Know Your Customer (KYC) obligations, and other payments compliance requirements.

Refurbed, a marketplace for refurbished electronics, introduced Connect's streamlined onboarding to its sellers and reported a 3x increase in onboarded sellers and 5x growth in sales volume.

Financial Tools as a Loyalty Driver

Sellers need capital to grow, cards to manage spending, and fast access to earned income. Marketplaces that provide these services embed themselves deeper into the seller's daily operations.

Stripe Instant Payouts gives sellers immediate access to payments for a small fee. Ninety percent of gig workers say they would use instant payouts if their platform offered them. When demand for food delivery intensified during the pandemic, Canada's SkipTheDishes used Instant Payouts to build Fast Cash, which pays couriers in as little as 30 minutes. The feature increased courier retention by 10% among the cohort that adopted it.

Instant Payouts is part of a broader set of embedded finance options:

  • Lending through Stripe Capital, which bases financing decisions on a seller's payment volume and history on Stripe. BloomNation offers embedded lending to its florists to ease cash constraints and fund growth.
  • Card issuance through Stripe Issuing, which lets marketplace businesses spend on credit or with earned funds. Shipt gave its shoppers Stripe-issued spend cards to complete orders without the hassle of saving receipts.

These offerings let sellers handle more of their financial lives in one place, and they open new revenue streams for the marketplaces themselves.

From Transaction Processing to Seller Enablement

Early digital marketplaces like Amazon.com and Zappos focused mainly on transaction processing. Later, platforms added subscriptions such as Amazon Prime and DashPass by DoorDash to improve the buyer experience. The current wave of innovation is different: it's aimed at making life better for sellers.

Stripe launched Connect in 2012 as infrastructure for platforms and marketplaces. Today it supports more than eight million businesses, sellers, and service providers. The shift toward seller-centric features reflects a simple economic reality: marketplaces thrive when the people selling on them thrive.