Visa has created a new category of payment aggregator – a “marketplace” – and now has updated the requirements to qualify as a marketplace under Visa’s rules.
The new marketplace designation will have an immediate impact in the ecommerce market by clarifying the status and requirements applicable to ecommerce sites looking to add payment processing services to their platforms.
Traditionally, many of the largest marketplaces have incorporated payments by partnering with more traditional payment processors to handle the nuts and bolts of acquiring, clearing, and settlement. The new marketplace category will provide these websites with additional flexibility to offer their own processing solutions.
Among other requirements, to qualify as a marketplace under the Visa rules, a company must:
- Offer a website or mobile application that brings together retailers and buyers;
- Enter into a contract with each retailer governing the marketplace’s processing of transactions on behalf of the retailer;
- Prominently display the name or brand of the marketplace on the website or application;
- Manage transactions (sales and refunds) for the retailers and receive settlement for transactions on their behalf; and
- Resolve or accept financial liability for cardholder disputes.
There are a number of other important limitations for marketplaces, including that no retailer on the marketplace may exceed USD 10 million in annual Visa volume through the marketplace, and no retailer may exceed 10% of the marketplace’s annual Visa volume. Further, the rules prohibit certain retailers from processing through a marketplace, including franchises, travel agents, and certain high-risk retailers.