Decoding WooCommerce Payment Gateways: A Guide To Marketplace Payments

Decoding WooCommerce Payment Gateways: A Guide To Marketplace Payments

At WC Vendors, we’re often asked questions about marketplace payments. One of the most common queries is, “Which payment gateway is supported?” to which the quick answer is, “All WooCommerce gateways are supported.” Another one is, “How do I pay my vendors?”

Typically, confusion surrounds the two kinds of marketplace payments:

  • Payments from customers for orders
  • Payouts to vendors for their earnings (commissions)

Whether you should perform these payments simultaneously or separately is usually where the confusion stems from.

How and when you pay your vendors is a business and technical decision. You’ll need to learn how to configure your marketplace payments, policies, and procedures. You’ll have to determine whether to pay your vendors instantly or after customers have placed orders. In addition, you must figure out if you should implement a regular vendor payment schedule that operates weekly, monthly, or quarterly.

Today, we’ll discuss essential details about marketplace payments. So let’s get right to it!

The 2 Types Of Marketplace Payments

When learning about payments in your online marketplace, the best place to start is the two types of marketplace payments.

1. Payments From Customers

Whenever a customer places an order, they pay for it at checkout.

You can use any WooCommerce payment gateway to process the customer’s payment. This logs your vendors‘ earnings into the commission table, which lists said earnings as “due.” This means that you haven’t paid them yet.

commission table
Commission table (click to zoom)

Payment flow explained

  1. A customer browses your marketplace and adds products to their cart.
  2. They proceed to checkout where they’re provided a list of payment gateways (such as Stripe Connect) to process payments.
  3. They pay with their credit card and the order is marked as “processing” or “completed.”
  4. When the payment is confirmed, the system is triggered to calculate the earnings (commissions) due for the vendor(s). Furthermore, said due earnings are noted down on the commission table.
  5. The transaction with the customer is completed.
  6. Your account reflects the payment for the total order.

Now that you’ve received the customer’s payment, you must pay your vendors the money you owe them.

2. Payouts To Vendors

Once a customer has paid for their order, you’ll owe a commission to the vendor for the product(s) in that order. How you pay this vendor is up to you, with your chosen method depending on how and when you want to make the payment.

When it comes to paying vendors, you have two payment methods available:

i. Use the marketplace’s payment system to pay your vendors

Using the multi-vendor marketplace payment system limits your options to supported gateways and payout systems. These payment gateways are required to support split payments to be compatible with a solution for marketplace payments.

ii. Use external systems to pay your vendors

This method comes with no limits regarding how you pay your vendors. WC Vendors allows you to export all vendor commissions, which creates a list of the payments you must make. You can then pay your vendors via bank transfers, checks, scheduled payments, or cash.

marketplace payments

Receiving And Making Marketplace Payments

Now, it’s time to tackle the processes of receiving customer payments and making vendor payments.

1. Receiving payments from customers

First, let’s answer another frequently asked question: “Can customers pay vendors directly?”

Generally speaking, no, customers can’t pay your vendors directly. They can’t skip payment processes the way eBay does, either. WC Vendors is limited by the WooCommerce gateway API, which isn’t built for direct payments.

Payments can be split between the marketplace and vendors using the vendor-compatible gateways listed below. However, all payments must initially be processed through the marketplace and then distributed, even if the entire payment is destined for the vendors.

Payment gateways for customers

Over 100 payment gateways exist for WooCommerce, and this list gets longer every day. You can use any WooCommerce-compatible payment gateway with WC Vendors. This allows you to accept payments for customer orders from anywhere in the world.

Payment gateways for WordPress that support payments from customers and payouts to vendors alike include:

  • Stripe
  • PayPal
marketplace payments

2. Paying your vendors

How and when you want to pay your vendors defines your payment solution.

Two methods are available: paying your vendors instantly or paying them on a schedule. Which one you pick is a business decision you must make.

i. Paying a vendor their commission instantly once the customer completes a purchase


  • Saves time
  • Pays vendors instantly
  • Enhances convenience for both vendors and the marketplace
  • Eliminates the need to manually track and disburse payments to vendors


  • Restricts the available payment solutions
  • May potentially cause complications with refunds and disputes
  • Requires trust in vendors’ product delivery
  • May entail responsibility for resolving disputes

ii. Paying vendors on a schedule or manually


  • Allows verification that vendors have shipped their products before disbursing their commissions
  • Reduces fees associated with payment transfers
  • Lets you effortlessly pay your vendors in bulk through your preferred payment method
  • Enables you to tailor payment methods for each vendor individually
  • Allows use of any preferred payment gateway of your choice
  • Streamlines dispute resolution processes with customers


  • Increased workload for your business in tracking and remunerating vendors
  • Vendors might find your payout schedule inconvenient

Most marketplaces pay their vendors on a schedule, as this grants them far greater control over their business.

Payout solutions for vendors

If you wish to pay your vendors through your marketplace, the following solutions are available:

1. WC Vendors Stripe Connect

Do you wish to take credit card payments from your customers and pay your vendors simultaneously? Then use the Stripe Connect platform, which makes this process quick and easy.

However, only those whose country is supported by Stripe and Stripe Connect can enjoy this option. Currently, Stripe is available in 46 countries.

Stripe Connect for marketplace payments
Stripe Connect is ideal for marketplace payments
2. Payouts for WC Vendors

Since the depreciation of PayPal Adaptive payments, there’s been no easy solution for paying your vendors via PayPal.

Thankfully, there’s The Plugin Pros’ new extension, Payouts. This is a commission-only solution for marketplace payments.

Payouts isn’t a payment gateway. Rather, it relies on PayPal’s new Payouts system to work. Thus, to pay your vendors on a schedule or instantly, you’ll need to install and configure a regular PayPal gateway, such as the one that ships with WooCommerce.

3. MangoPay WooCommerce

An option for European users, MangoPay provides gateway and commission payments. It’s fully compatible with WC Vendors.

MangoPay allows you to process credit card payments using an alternative method. It pays vendors only once they’ve marked their items as shipped, giving you peace of mind about possible disputes.

4. Escrow for WooCommerce

The developers over at have worked to make their payment gateway compatible with WC Vendors. Another alternative to taking marketplace payments from customers, this solution is available wherever is available.

5. Mollie Connect for WC Vendors

Mollie Connect for WC Vendors allows vendors to use their Mollie account to sell products/services on your WooCommerce marketplace. Among the most popular payment gateways in West Europe, it’s trusted and used by more than 40,000 WooCommerce store owners.

6. Square Payment for WC Vendors

This plugin integrates Square Payment Gateway with WC Vendors, allowing marketplace administrators to connect a Square account and use the Authorize a Vendor through OAuth functionality.

7. PayPal Multi-Account for WooCommerce

With this plugin, you can have payments go directly to your vendors’ PayPal accounts. This allows you to configure multiple PayPal accounts within WooCommerce, which are then paid based on rules you create.

marketplace payments


Marketplace payments are a crucial aspect of any multi-vendor marketplace. After all, they allow you to collect payments from your customers and give your vendors the commissions they’re due.

To master marketplace payments, familiarize yourself with the following concepts:

  1. The 2 types of marketplace payments
  2. Receiving and making marketplace payments

Do you have any questions about marketplace payments? Reach out to us and let us know; we’d be happy to hear from you!

Posted in Payments