🏪 Marketplaces and the safeguarding of funds

Why marketplaces are subject to specific rules

A marketplace connects buyers with third-party sellers: individuals, artisans, small businesses, or brands. It collects the buyer’s payment and then passes it on to the seller, minus its commission. Routing the money through the platform’s accounts serves three distinct purposes. It protects the buyer, since the money is released only after confirmation or delivery. It gives the seller a single point of contact for payments received, credit memos, and disputes. And it lets the platform take its commission along the way, with no separate billing and no debt recovery to organize. Throughout that time, the platform temporarily holds funds that do not belong to it. Holding those funds brings its business within the scope of payment services, which require a license or an exemption.

• Holding funds: the money passes through an account the platform controls, even if only for a few hours.
• Control over the funds: the platform decides when and how much to pay out (timing, holdbacks, disputes).
• De facto financial intermediation: the buyer’s debt to the seller is discharged as soon as the buyer pays the platform. Regulators treat this as the decisive criterion.
• Insolvency risk: without protection, sellers’ funds would become part of the platform’s estate, available to its creditors.

Three routes to compliance

A platform that wants to collect for its sellers has three options, which differ in how much regulatory responsibility it is willing to take on. It can obtain its own license as a payment institution (PI) or e-money institution (EMI); it can become the agent of a licensed PSP; or it can rely entirely on a PSP for platforms that collects on its behalf. A fourth route exists, the so-called commercial agent exemption (Article 3(b) of PSD2), but its scope has become very narrow. It requires acting on behalf of only one of the two parties, the seller or the buyer, whereas a typical marketplace serves both. Under the restrictive reading imposed by PSD2 and the EBA, a platform generally cannot demonstrate this.

Safeguarding: protecting third-party funds

Safeguarding (also called ring-fencing) is the obligation for a firm to keep the funds it receives from its users separate from its own funds. It is the quid pro quo for being allowed to hold customer money. A payment institution must strictly segregate the money it receives on behalf of its users, however long it holds it. In practice, under Article L. 522-17 of the French Monetary and Financial Code for PIs and Article L. 526-32 for EMIs, marketplace sellers’ funds are deposited in a safeguarding account opened with a credit institution and kept separate from the PSP’s operating accounts.

• Segregated deposit: a dedicated safeguarding account at a bank, no later than the end of the business day after the funds are received.
• Alternative: investment in secure, liquid, low-risk assets, held in separate accounts.
• Another alternative: coverage by an insurance policy or a comparable guarantee from an insurer or a credit institution.
• Daily reconciliation: the PSP must continuously reconcile total customer balances against the safeguarded balance. Any discrepancy is a major compliance incident.

Seller KYC: onboarding under AML/CFT rules

The PSP that holds the sellers’ accounts is subject to anti-money laundering and counter-terrorist financing (AML/CFT) rules. It must identify and verify every seller before paying out any funds, a check known as seller KYC (or KYB, Know Your Business, for legal entities). How this check is run matters directly to the marketplace, for two very different reasons. A smooth sign-up process is a competitive advantage in recruiting sellers. And sloppy KYC exposes the PSP to penalties, along with the platform whose payments it processes.

• Identity: ID document of the legal representative (for an individual, the seller themselves), verified by a document check or video identification.
• Business existence: Kbis extract (the French certificate of incorporation) or equivalent, articles of association, address.
• Ultimate beneficial owners (UBOs): identifying the individuals who hold more than 25% of the capital or voting rights.
• Payout account: an IBAN in the seller’s name (name/IBAN match, reinforced by Verification of Payee, or VoP, mandatory since October 2025).
• Screening: sanctions and asset-freeze lists, politically exposed persons (PEPs), high-risk countries.
• Ongoing monitoring: watching for unusual flows (amounts inconsistent with the business, triangulation fraud patterns, self-purchasing).

Since 2023, these financial obligations have been joined by a tax obligation: the DAC7 directive requires platforms to collect their sellers’ income data and report it to the tax authorities (see the last section). KYC and DAC7 overlap heavily, since both require the seller’s identity, address, and bank details. A well-designed architecture therefore collects the data once (identity, SIREN/tax ID, address, IBAN) for both regimes, in a single step when the seller signs up.

Splits, commissions, and payouts

A payment split allocates a single payment among several recipients: the sellers (one cart can include several), the platform (its commission), and sometimes third parties (carrier, insurer, franchisor). Technically, the PSP credits payment accounts (often called wallets or balances) opened in each seller’s name. It then executes payouts to their bank accounts at the chosen frequency: instant, daily, weekly, or on delivery under an escrow model.

{
  "amount": { "currency": "EUR", "value": 12000 },
  "reference": "ORD-2026-84512",
  "splits": [
    {
      "account": "seller_8f3a21",
      "amount": { "value": 7200 },
      "description": "Seller A - sneakers"
    },
    {
      "account": "seller_c94d07",
      "amount": { "value": 3300 },
      "description": "Seller B - accessories"
    },
    {
      "account": "platform_fees",
      "amount": { "value": 1500 },
      "description": "Marketplace commission 12.5%"
    }
  ],
  "capture": "on_delivery",
  "payout_schedule": "T+2_after_capture"
}

• Multi-seller cart: a single debit on the buyer’s side, N credits on the sellers’ side. The split must be accurate to the cent, including refunds.
• Partial refund: claw back the seller’s share and recalculate the commission; some contracts let the platform keep its commission.
• Escrow / delayed capture: funds are released only on delivery or when the cooling-off period expires, standard practice in C2C (clothing, ticketing).
• Variable commission: by category, by seller, by promotional campaign. The split engine must be rules-driven, not hard-coded.
• Negative seller balance: a refund issued after payout creates a receivable from the seller, to be recovered from future sales.

Providers, DAC7, and trends

Leading PSPs for platformsMangopayLELemonwayStripe ConnectAdyen for PlatformsPayPal Commerce Platform

DAC7 in practice. Every platform (marketplaces for goods, services, property rentals, or vehicle rentals) must report its sellers’ income to the tax authorities each year, by January 31. The report includes each seller’s identity, tax ID, address, and IBAN. A two-part threshold excludes occasional sellers of goods: fewer than 30 sales and €2,000 or less in the year. The data is then exchanged automatically among EU tax authorities. The marketplace must block any seller who refuses to provide tax information, which ties tax compliance to the sign-up flow described above.