How Payment Facilitation Helps Marketplace Platform Users

I recently learned about a payment-facilitation-as-a-service company called Tilled. This company and its peers help marketplace platforms process payments by turning them into payment facilitators. So most of their marketing is aimed at convincing marketplace platforms to sign up for their services. But after thinking about how writer marketplace platforms like WriterAccess and Upwork function, I realized that when a marketplace becomes a payment facilitator that also benefits other businesses that are involved in these transactions.

Benefits for Freelancers

Payment facilitators provide embedded payment processing services to their users. That means you can sign up for a platform like WriterAccess, Clearvoice, or Upwork without needing to set up a separate merchant account. The marketplace has a master merchant account with the payment processing company, and each freelancer who signs up for the platform automatically gets a sub-merchant account.

This means that you can sign up for the marketplace platform and immediately start working for clients and accepting payments from them. That’s really helpful because a lot of freelancers do gig work so they can get money right now to pay their bills. They don’t want to wait for a payment processor like Stripe or PayPal to process their application for a merchant account before they can start receiving payments from clients.

And the marketplace also manages your financial records, making tax preparation and financial compliance easier. You can log into the sub-merchant account and see how many hours you worked or how much money you earned.

I’ve seen writer marketplace platforms that are not payment facilitators as well. Those platforms require writers to sign up for a merchant account to accept payments through the platform. Sometimes you need a merchant account with a specific payment processor. A while back I opened up a Stripe merchant account because of a requirement like this.

Benefits for Payment Processors

Payment facilitation is an example of embedded finance. The payment facilitation service is built into the platform itself and it handles payment processing and related services for the platform. Merchants can send their invoices to clients through the platform, and clients can pay invoices through the platform, without visiting any third-party payment processing or bank websites.

As a result, if the marketplace platform has 1 million users, then the payment processor it selects will get 1 million new customers. And that payment processor won’t have to do any additional marketing to sign up these customers and collect a cut of each of their transactions. Banks and payment processors often have to pay out large incentives to sign up new customers. But when the payment processor’s the main payment option for the marketplace website it gains lots of customers very rapidly. Consider the relationship between eBay and PayPal and how that helped PayPal in its startup days.

Meanwhile, once merchants and their clients start doing business through the platform, they might no longer need third-party financial services. These platforms are convenient for clients who need to hire and manage lots of freelancers because they can store all of the client’s documents in one place. So the embedded payment processor in the marketplace platform could replace the payment processing service that the freelancer or the client was using before.

Benefits for Clients

The clients who use writing marketplace platforms are often managing large teams of freelance writers. A digital agency might have 100 writers who send them invoices and receive payments. If all of these writers had their own merchant accounts with different payment processing companies, this would add lots of additional record-keeping work for the agency.

If the marketplace platform is the payment facilitator and handles payment processing and invoice processing, several record-keeping problems go away. The agency won’t have to worry about what types of payments a writer’s merchant account can accept, or whether a writer has a merchant account in the first place. The agency will know that it’s receiving valid invoices and won’t have to check whether an invoice sender is legitimate. The platform can even process and pay invoices automatically for the agency.


If a marketplace becomes a payment facilitator, this also benefits the platform’s users and partners. It’s easier for me to explain how this works with marketplace platforms that cater to freelance writers. But the same benefits apply to marketplace platforms for other types of independent contractors, such as construction contractors and healthcare workers. And by providing these benefits, the marketplace platform becomes more competitive when it signs up with a payment-facilitation-as-a-service company.

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