Ask HN: Payment gateway for multi-vendor marketplace as an early stage startup?

I’m in the process of building a relatively typical e-commerce marketplace: vendor creates account, lists items, sells, platform takes a small fee. It focuses on a large and underserved market, a domain I know very well, and I’m excited to use it and share with the community.

I’m having trouble getting the payment piece sorted and I’d love to hear experiences and thoughts from anyone who’s been through this before.

My first choice for a payment gateway is PayPal, particularly the PayPal Commerce Marketplace. PayPal is already ubiquitous in the world that I work with. The sole large company who serves this space also uses it so it will make for an easier pitch to get folks to try my product. PPCP is a program within PayPal, the only on-ramp appears to be a form that you fill out and hope to hear back from someone. I spent all morning try to reach someone on the phone and struck out. I’ve been advised that they won’t talk to you at all if you don’t have a plan to reach $2M in the first year and an established business presence. I, a solo first-time founder (but no stranger to early stage startups), have neither a plan to reach that revenue immediately nor an established business to leverage. I’d like to focus on my product instead of pitching to PayPal.

Stripe Connect looks like the best alternative but it will make it harder for me to attract merchants. I’d need their Express product, which comes with additional fees. Their payout approach looks more expensive than PayPal and I’ve been told their merchant onboarding isn’t as pleasant.

Others? There’s Adyen, who I’m told won’t talk to anyone sub-Series A. Braintree seem to have closed their marketplace platform product in favor of PayPal’s. Square has limited support in Europe, where many of my merchants will be based.

I’m getting the impression that this is a domain that primarily wants the business of existing enterprises that are branching out, or maybe a certain type of startup that raises a lot of money before ever building anything. It’s frustrating and disheartening. My MVP is coming along, I plan on starting a small public trial soon, but I’m very concerned about the potential for this to derail me.

Anyone every build a company or product like this and run into these problems? Any advice, recommendations? I’d appreciate your help.

I’m in a major US city and it seems extremely challenging to get this going, I’m sorry you’re going through an even more extreme version of it!

It’s so frustrating. For the longest time, I’ve been wondering why nobody comes with the elephant company that dominates my domain and I’m starting to think this is a big part of the answer. The system seems designed for established companies or folks with a lot of resources. Launching any startup is tough, this is something I worry tenacity and product engineering talent alone can’t get past.

Setting it up through Shopify and using Onport might be an option. It used to be a more reasonably price ($200 range) but it looks like it has raised their prices since Farfetch acquired them. https://onport.com

This is something I’m considering. I can go live with a single PayPal business account since initial users will be limited to a very small pool of testers. I can have PayPal Commerce Platform working via Sandbox account and ready to go and can do something similar for Stripe Connect. But I need to pick what gets my attention ruthlessly, especially so early, and I’d like to have one reliable partner early on so I can focus on the product.

Talked to these guys a couple of years ago - seem to be a fit for you

https://www.getbalance.com/