Dec 27, 2023

What is a marketplace transaction flow?

This article will describe the meaning of transaction flow in the context of online marketplaces and two-sided platforms. It will give a definition and some examples where possible.

Definition of transaction flow

A transaction is an exchange of value between a customer and a provider. The transaction flow defines how this connection happens once these users have been successfully matched on your marketplace. Effortless transactions are a large part of the value any marketplace provides to its users, which is why designing a smooth and secure transaction flow is extremely important.

On a single-vendor eCommerce site, a transaction process can be as simple as 1. buyer purchases a listing and 2. the seller delivers the product. However, since marketplaces have multiple providers and customers, their transaction flows tend to be more complex. Maybe your transaction flow includes price negotiation before payment is initiated, or the provider and customer are prompted to review each other at the end of the purchase. Payments are usually first held in escrow and then split between the provider and the platform. There may be additional service fees and different kinds of policies for cancellations and refunds. All these steps are part of your transaction flow.

Learn about other marketplace concepts

Start your 14-day free trial

Create a marketplace today!

  • Launch quickly, without coding
  • Extend infinitely
  • Scale to any size
Start free trial

No credit card required