BlueSnap Marketplace—Payment Processing For A Collaborative Economy

Before working at BlueSnap, I volunteered at charities dealing with issues close to my heart, specifically at-risk youth. I was involved in numerous fundraising efforts, where I helped raise money for things like food, shelter, and simply keeping the lights on for many organizations. It was an enormous challenge, but gave me a valuable first-hand look at what goes on behind the scenes.

Later, when I came to BlueSnap, I was lucky enough to get involved with a new project—the BlueSnap Marketplace. I loved it from day one because it makes so much sense for today’s business models, and because I knew how helpful it would be to the charitable organizations I’d worked with previously.

The BlueSnap Marketplace is a way for businesses to share profits with multiple people, who can begin processing immediately while the KYC and banking paperwork gets sorted out. Essentially, it is a payment processing tool for a multi-party marketplace.

It’s a solution that eases some of the challenges associated with the multiple payouts and moving parts that characterize charities and non-governmental organizations. It will also be a welcome payment tool for modern merchants participating in the sharing economy. Let me give you a closer look at exactly how it works.

How does the BlueSnap Marketplace work?

If you’re a BlueSnap merchant, the Marketplace gives you access to a robust payment processing tool that allows you to work with vendors and keep a cut of the sale amount for yourself. When you use the BlueSnap Marketplace, there’s no need to complete the full KYC paperwork before vendors start selling; as you can request the KYC and banking details anytime up until the point you release the funds.

What is the BlueSnap Marketplace used for?

There are dozens of potential use cases, but here are four scenarios to get the ideas flowing:

The Sponsored Charity Race

A while back I lived in Sydney, Australia, and used to go running regularly. I registered for a race called “City2Surf,” where hundreds of Australians dress in running gear and/or fantastic costumes to run from the city to the beach. After I registered, I received a link to a personal page within the City2Surf website where my friends and family could “sponsor” me—which essentially meant asking people to donate money to a charity of my choice to encourage me to run. That race eventually collected millions of dollars for various charities (my own fundraising page topped out at $1,000), and I had an amazing day running alongside gorillas, ballerinas, and a slew of other extraordinary creatures.

If you want to build your own website to handle sponsored charity races, the BlueSnap Marketplace can help you create the payment side of this solution. You will need to handle the registration of the runners yourself (charge a flat fee for participation using the BlueSnap Payment API), and then create a list of charities for runners to choose from.

Here’s how it works: From a payment perspective, each charity on the list is designated as a vendor. Your runners register to race, choose a charity to work with, and get a link to a payment page. This page includes their name, charity of choice, and space for a message from the runner to potential sponsors. You can design the page however you like, and use BlueSnap’s Client-Side Encryption or Hosted Payment Fields  to send BlueSnap an API call when a sponsor fills in their donation amount. Once payment card details have been entered, a transaction is automatically created with the charity vendor ID embedded. You can modify the amount you keep from each transaction, and even freeze and unfreeze charities as needed.

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Check out the BlueSnap Developer Hub for extensive documentation on everything from our Payment API to the Marketplace Guide. 

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After the race is complete, you can assign bank details and payout schedules to each charity, and the rest is taken care of by BlueSnap!

The Crowdfunding Website

In my opinion, one of the best things that has emerged from the online payment world is crowdfunding. Sites like Kickstarter and GoFundMe allow people to invest in a product or idea. When (and if!) creators reach their target fundraising goal, they then have the funds to bring their project or idea to life.

If you want to create your own version of a crowdfunding site, the BlueSnap Marketplace can help with the payment side.

Here’s how it works: Those who submit a new project or idea for crowdfunding supply their KYC details. Once they do this, you can immediately designate them as vendors. These vendors are pending—meaning the account cannot be paid out until they receive risk & underwriting approval —but they can be used in transactions, which means projects can start receiving donations from the public right away.

Each project can have a different fundraising target attached, and an internal counter adds up funds as they are submitted. This makes it easy to keep track of donations to each vendor since you are the conduit to BlueSnap’s API and have full control of each transaction. You can also choose to keep the vendor’s account active only during their campaign, thus making the funding deadline very real. When the vendor’s project hits its crowdfunding target, you can then input further details necessary for payment. Once everything is in place, BlueSnap’s Risk Team evaluates the vendors and allows them to be paid accordingly. You may choose to take a small percentage of each donation for managing the crowdfunding platform, and you could modulate the commission charges by the type of product the project wishes to fund.

The Ride-Sharing App

Companies that offer ride services and carpool matchups are quickly growing in the marketplace. If you’d like to build your own ride-sharing app, the biggest hurdle might be payment processing (especially when there are many transactions at once). How do you set it up to ensure that drivers get credit card information securely from passengers, and you receive a cut of each fare? The BlueSnap Marketplace is an ideal solution, as it has the scalability needed to manage a high volume of payments and the flexibility to pay out to thousands of drivers.

Here’s how it works: With a minimal amount of information, you create a vendor account for each driver who registers with your app. Drivers enter their passenger’s credit card details into the app. The app will send the payment details to you and you can either run the transaction immediately in the BlueSnap Payment API, or wait and run all transactions later as a batch. You can even raise or lower an individual driver’s commission based on the passenger’s rating of the ride.

Since the BlueSnap marketplace allows you to change the vendor’s agreement at any time, you can also disable or enable drivers’ accounts and change their default commission rate—two things which will help encourage excellent customer service.

The Subscription Sales Team

The BlueSnap Marketplace allows vendors (salespeople) to get commissions from recurring charges. In other words, vendors profit from the sale of subscriptions beyond the initial purchase.

Let’s say you want to hire salespeople to sell your subscription service or product. Usually, a portion of their compensation is comprised of commission, but commission is a bit trickier with subscriptions. While your business profits from each recurring charge in a subscription, the salesperson usually only gets their commission once. But if you so choose, you can use the BlueSnap Marketplace to include commissions in recurring subscription charges.

Here’s how it works: Create a vendor account for each member of the sales team, including each vendor’s KYC and banking details in full. You can decide to credit vendors for recurring sales anytime—either in the initial “create vendor” call or anytime after that—by updating the individual vendor’s agreement and changing the value of the field “recurring-commission” from “Y” to “N” and vice versa.

Benefits Of The BlueSnap Marketplace

Aside from the obvious benefits of bringing multiple buyers and sellers together, the BlueSnap Marketplace can help your business in other ways as well.

Reduced PCI Compliance Burden

When it comes to asking the shopper for their payment card, shipping, and billing details, you’ll need a checkout page. BlueSnap offers numerous out-of-the-box checkout pages to make things easy—but you may decide to build your own page from the ground up. If you do, BlueSnap can help you collect credit card numbers and forward them on without the data ever hitting your servers. And, you can integrate our checkout pages in an app or a website quickly.

Insightful Business Intelligence Reports

When you reach the point of having a few dozen (or even hundreds!) of vendors, keeping track of them all can be daunting. Luckily, along with its payment processing tool, BlueSnap offers an extended business intelligence toolkit with reporting capabilities. You can integrate these business intelligence tools into your own system or use the BlueSnap system—and you’ll gain access to reports showing you which vendors are doing well, amounts paid to each vendor, vendor payout dates, and a list of active vendors. You can also take snapshots of the data to see how your marketplace is growing over time.

Developer Notes

For developer use, we designed a simple REST API called “vendors.” You can use it to create a new vendor, update an existing vendor, retrieve a specific vendor’s details, or retrieve all your vendors. Additionally, our existing payment API now supports vendors for each transaction—you can add the vendor ID and, if you want, a specific commission override for individual transactions. The API works with credit cards and electronic checks.

A Simple Create Vendor Call

Here’s how the simplest Create Vendor call might go:

POST to https://ws.bluesnap.com/services/2/vendors (use your API credentials in the header so we know who you are)

Content type—application/xml or application/json (I’ll use XML in this example)

Content:

<vendor xmlns=”http://ws.plimus.com”>

<email>[email protected]</email>

<country>US</country>

</vendor>

The reply will include a location with the vendor ID, something like 404228. You can now create sales for vendor 404228 and specify how much they’ll receive from this sale; we’ll handle it from there.

An example of a sale using our Payment API, with our new 404228 vendor who will be getting 75% of a $100 deal:

<card-transaction xmlns=”http://ws.plimus.com”>

<card-transaction-type>AUTH_CAPTURE</card-transaction-type>

<recurring-transaction>ECOMMERCE</recurring-transaction>

<soft-descriptor>DescTest</soft-descriptor>

<vendor-info>

     <vendor-id>404228</vendor-id>

     <commission-percent>75</commission-percent>

  </vendor-info>

<amount>100.00</amount>

<currency>USD</currency>

<card-holder-info>

<first-name>First Name of the shopper</first-name>

<last-name>Last name of the shopper</last-name>

<zip>123456</zip>

</card-holder-info>

<credit-card> <!–(this part could be encrypted with Client-Side encryption, we’ll tell you how!)–>

<card-number>*********9299</card-number>

<security-code>837</security-code>

<expiration-month>02</expiration-month>

<expiration-year>2018</expiration-year>

</credit-card>

</card-transaction>

You can fill in the vendor’s bank details later, fill in the payout frequency you want them to have (daily, weekly, or monthly), and add a few days’ delay beyond that if you want to be sure you get the money first. If you prefer, you can give vendors a default percentage of any purchase, temporarily disable (and re-enable) their account, and choose what amount, if any, they’ll get from subscription sales.

The Long Form Create Vendor

To avoid delays in vendor payout, entering the full KYC and banking details up front is recommended. The full input may look a bit scary, but it’s broken down below:

<vendor xmlns=”http://ws.plimus.com“> –vendor’s own details, as they could be a company (we collect tax ID and such)

<email>[email protected]</email> –vendor’s main email

<name>Porpoise Spit Company</name> –vendor’s company name

<frequency>MONTHLY</frequency> –vendor’s payout cycle (once a month, shown here); other options are DAILY, WEEKLY

<delay>4</delay> –delay in days beyond the payment cycle, in case you need a little more time before BlueSnap pays the vendor

<tax-id>32983829</tax-id> –vendor’s tax ID number; (we can also support the VAT ID, but not both)

<first-name>Betty</first-name> –vendor’s other details

<last-name>Heslop</last-name>

<phone>67783499</phone>

<address>10-12 Fuchsia Cres</address>

<address2>unit 004</address2>

<city>Macquarie Fields</city>

<country>AU</country>

<zip>2564</zip>

 

<vendor-principal> –vendor principal, an actual person acting as the legal representative for the vendor; we collect birthday and personal ID

<first-name>Muriel</first-name>

<last-name>Heslop</last-name>

<address>40-42 Metella Rd</address>

<city>Toongabbie </city>

<country>AU</country>

<zip>2146</zip>

<dob>21-03-1970</dob>

<personal-identification-number>44327743</personal-identification-number>

<email>[email protected]</email>

</vendor-principal>

 

<vendor-agreement> –vendor agreement, including status, how much to pay them, and subscription percentages

<commission-percent>10</commission-percent>

<account-status>ACTIVE</account-status>

<recurring-commission>Y</recurring-commission>

</vendor-agreement>

 

<payout-info> –vendor’s bank details; we support multiple payout methods and currencies

<payout-type>ACH</payout-type>

<base-currency>USD</base-currency>

<name-on-account>Deirdre Chambers</name-on-account>

<bank-account-type>CHECKING</bank-account-type>

<bank-account-class>PERSONAL</bank-account-class>

<bank-name>First Bank of Newton</bank-name>

<bank-id>12445</bank-id>

<country>US</country>

<state>KS</state>

<city>Newton</city>

<address>128 E Broadway St</address>

<zip>67114</zip>

<bank-account-id>36628822</bank-account-id>

</payout-info>

<payout-info>

<payout-type>SEPA</payout-type>

<base-currency>EUR</base-currency>

<name-on-account>Deirdre Chambers</name-on-account>

<bank-account-type>CHECKING</bank-account-type>

<bank-account-class>PERSONAL</bank-account-class>

<bank-name>First National</bank-name>

<bank-id>44352</bank-id>

<iban>74466398987773288292902</iban>

<swift-bic>hhsjeuue</swift-bic>

<country>AT</country>

<city>Leoben</city>

<address>Anzengrubergasse 7</address>

<zip>8700</zip>

<bank-account-id>377289209</bank-account-id>

</payout-info>

</vendor>

Need help with payment processing for your marketplace business?

Our Developer’s Hub has extensive documentation and is a great reference for any resource you could use for integration (and every conceivable scenario!). A special section is dedicated solely to our Payment API. If you have any questions along the way, or just need some advice, we also have a great support team to take you through the steps. I hope this information helps you make the most of your business!