Which is the best payment model for a services marketplace?

I am currently developing a services marketplace (for students/tutors). Which payment model would you suggest out of subscription, escrow or a direct services fee for the transaction?


There are several questions/pieces of information you would want to consider to know which avenue to go down (a few highlighted below):

- which platform are you going to be on-boarding and connecting students/tutors thoughts? web, mobile, hybrid or brick & mortar (includes actual phone calls etc)
- how often are disbursements of funds going to happen with a typical transaction period (say 1 month)?
- what is your service fee/cut for the work completed? are you working on a %/commission basis or are you generating funds from clients in another way?
- which party shoulders the service fee your charge? Is it just one party or both?
- is the transaction always intending to be a 1 to 1 relationship (i.e. would a group of students be able to hire a tutor for an exam review session and split the costs etc?)

those are just a few things that should be top of mind as you consider which ways and means you intend to collect/process payments for your service. I'd be happy to jump on a call and walk through these and other questions to help get you on the payment model/processor right for you.

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Answered 9 years ago

Because you're building a two-sided marketplace, your question would require validation of your hypothesis from your supply and demand base. Because there is a higher utility value and lower cost of customer acquisition with a subscription model, I would design around that payment model. So ask yourself (and your demand prospects) what subscription services would they value the most (create a list of top 5 to 10 services). Then, determine what just in time services would they value the most (again, creating a list of top 5 to 10). Build your supply based market around both subscription and just in time services. After you've done that, use an escrow payment model for JIT services.

Answered 9 years ago

I would definitely recommend escrowing the funds in order to offer the best user experience for both students and teachers. This is central for the success of your project. The model I'm thinking about is used by merchants providing similar services like task rabbit. An important question is where are you going to launch this platform ? Regulation is very different according to the place you're located. In Europe, third party payment is strictly controlled by authorities and require strict KYC data in order to be compliant with EU payment directives. In the U.S. I would recommend some solutions already tested and approved by the sharing economy ecosystems. All the best with your project. Bertrand

Answered 9 years ago

Escrow would be best because it would not only keep you in the center of the hype but also increase reliability of the service for the parties.

Answered 9 years ago

The majority of online marketplaces operate with one of the three basic strategies: commission, subscription, and listing fees. But actually, there are many more revenue models on the market. Each of them has its own benefits and difficulties in implementation. I have already written a blog for this, you may refer to

Since there are already so many marketplace marketplaces for students/tutors so using a subscription, escrow or a direct services fee for the transaction wouldn't work. You need to think out of the box. I've successfully helped over hundreds of entrepreneurs, marketplace owners, and businesses, and I would be happy to help you. Please send me more information before scheduling a call - so I can give you maximum value for your money. Take a look at the great reviews I’ve received:

Answered 3 years ago

There are several models to opt for. But I would suggest that learn to mix things up, which will make you market disruptor. You can mix Fiverr with CouchSurfing to create a new model.
Fiverr is a freelance marketplace that connects freelancers that offer digital services with customers. It charges the customers $1 for orders up to $20. A typical representative of the subscription model is CouchSurfing, where local people can accept travellers from all over the world. Upon registration, new users get 10 free requests per week – messages that can be sent to a host. To get an unlimited number of requests, the users must pay $60 per year to verify their accounts.
You can read more here:
While there are many reasons why large, complex companies have a hard adapting to today’s much faster cycles of change, the root cause stems from core management practices that were designed for a much slower moving age. This model supposes that executives are astute fortune tellers, able to project market conditions and customer expectations 18 months away. This tradeoff no longer makes sense, as customer expectations, competitive threats, and tighter supply chains mandate actions driven by fast, constant feedback at the expense of certainty. Cycles of change are accelerating, and companies that want to grow profitably must be able to adjust, pivot, and reorganize as quickly as market conditions warrant. At Apple, staff members can override a manager’s decision if that decision makes the product worse. Every decision is centered around making the best possible product. Apple takes great pride in choosing effectiveness over efficiency and driving every decision through a value stream defined by product excellence, measured by customer delight and the resulting market share. At most large companies, creating customer value takes a backseat to pleasing the boss.
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Besides if you do have any questions give me a call:

Answered 3 years ago

Cryptocurrency payment is the best methods of payments

Answered 3 years ago

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