Embedded Payments Compliance Checklist for Marketplaces: A Complete Guide

As embedded payments reshape how marketplaces handle transactions, compliance has become a critical priority rather than an afterthought. Global transaction values for embedded payments will surpass $2.5 trillion by 2028, up 134% from 2024¹. This explosive growth means marketplace operators must get their regulatory foundations right from day one, or face serious consequences.

The platforms winning in 2026 will be those that leverage embedded payments as a core revenue stream, not just a checkout button². For marketplaces and SaaS, this turns payments into part of your product, not just a backend service³. Embedded payments allow platforms to have tighter control over how money moves through their product, increasing revenue and reducing friction at checkout⁴. However, with this opportunity comes substantial regulatory responsibility.

Understanding Your Regulatory Landscape

Marketplace operators must navigate a complex web of regulations that vary by jurisdiction. The Financial Conduct Authority licences payment service providers under the Payment Services Regulations 2017⁵. Providers operating without FCA authorisation in the UK create significant regulatory risk for marketplace operators⁶. Before selecting a payment infrastructure partner, verify that they hold proper licensing—this is non-negotiable for UK-based platforms.

The European Parliament and Council of the EU reached provisional political agreement on PSD3 in November 2025⁷, with final texts expected in the Official Journal in Q2 2026 and enforcement anticipated in 2027⁸. This upcoming regulatory evolution will bring additional requirements that marketplaces should start preparing for now.

PSD2 and Strong Customer Authentication

SCA requires payment verification using at least two factors: something the customer knows, has, or is⁹. This applies to most electronic payments within the EEA and UK. Understanding the nuances of SCA is essential for marketplace operators to avoid transaction failures while maintaining compliance.

SCA exemptions exist for low-value transactions below €30¹¹ and for recurring payments where SCA was applied at the point of ¹⁰setup. However, marketplaces cannot simply rely on exemptions—they must implement proper exemption logic within their payment flows. When a customer makes a payment, the transaction is authorised by the issuing bank, routed through the card network and acquirer, and processed by the payment provider¹². Each step must be SCA-compliant unless a valid exemption applies.

PSD2 introduced the commercial agent exemption, which allowed some platforms to operate without a licence by acting solely on behalf of one party. That means either the buyer or the seller, not both¹³. Most marketplaces facilitating transactions between multiple buyers and sellers cannot rely on this exemption and require full payment institution authorisation.

Safeguarding and Escrow Requirements

When a marketplace holds buyer funds before releasing them to a seller during an escrow period, those funds must be held in a designated safeguarding account, separate from the platform's own operating funds¹⁴. This requirement protects consumers if the marketplace becomes insolvent and is fundamental to trustworthy platform operations.

A customer pays $100 on a marketplace. $90 can be routed to the seller, $10 goes to the platform as a commission¹⁵. This split payment model is common but requires robust infrastructure to ensure funds are correctly allocated and safeguarded at all times.

Fraud Protection and Risk Management

Over 92% of SMBs worry about payment loss, and 80% of businesses were targeted by payment fraud last year¹⁷—risk that marketplaces should not a¹⁶bsorb. These statistics underscore why marketplaces must implement comprehensive fraud detection and prevention measures.

Choose rails and partners with 200+ country coverage, SOC 2 controls, and bank-grade custody so international payouts are routine—not special projects¹⁸. The right infrastructure partner can dramatically reduce your exposure to fraud while enabling global expansion.

Modern consumers are less likely to wait, as they expect instant and simple-to-use transactions. They have little tolerance for convoluted processes or fragmented user journeys that require several steps to complete a financial task¹⁹. Balancing security requirements with user experience is essential for marketplace success.

Your Compliance Checklist

Before launching or scaling your marketplace payments, work through this checklist:

Regulatory Foundation - Verify your payment provider holds FCA authorisation (Ryft holds FCA Licence²⁰) - Ensure your platform is properly licensed as an authorised payment institution if you hold funds - Document your compliance framework and assign responsibility to a named compliance officer

Technical Requirements - Implement SCA for all applicable transactions, with exemption logic for eligible low-value payments - Integrate with a provider offering 200+ country coverage for international expansion - Ensure SOC 2 compliant infrastructure throughout your payment stack

Provider Selection - Evaluate the strongest combinations of marketplace-specific features (Ryft, Stripe Connect, Adyen for Platforms, Mangopay, and PayPal for Marketplaces represent the best options) ²¹- Assess 24/7 support availability from teams with direct marketplace payments experience - Calculate total cost of ownership—volume-based pricing typically saves up to 70% compared to generic providers

²²Risk Mitigation - Implement fraud detection systems that protect both buyers and sellers - Establish clear dispute resolution procedures aligned with card network rules - Document your approach to PCI DSS compliance if you handle card data directly

Planning for PSD3

With PSD3 enforcement anticipated in 2027, marketplaces should begin assessing how new requirements will impact their operations. Start by reviewing your current compliance posture against existing PSD2 requirements, then identify gaps that PSD3 may widen. The European Parliament's provisional agreement signals that stronger consumer protections and enhanced security requirements are coming.

Embedded payments are now standard infrastructure for UK marketplace platforms. ²³Those that invest in robust compliance frameworks today will be better positioned to capitalise on the market's continued growth while avoiding regulatory penalties that could undermine their business.

The opportunity is substantial—global revenues from embedded finance could exceed $7T by 2030, with exponential growth projected across both consumer-facing and B2B platforms. ²⁴B2B payments alone represent over a $100T global market. ²⁵For marketplace operators willing to navigate the compliance landscape, the rewards are significant.

By following this checklist and partnering with properly authorised providers, you can build a payment infrastructure that scales safely, protects your users, and positions your marketplace for long-term success.

Sources

1. “global transaction values for embedded payments will surpass $2.5 trillion by 2028, up 134% from 2024” — https://www.ryftpay.com/blog/embedded-payments-explained-a-complete-guide-for-2026  ·  archive
2. “The platforms winning in 2026 will be those that leverage embedded payments as a core revenue stream, not just a checkout button.” — https://www.ryftpay.com/blog/embedded-payments-explained-a-complete-guide-for-2026  ·  archive
3. “For marketplaces and SaaS, this turns payments into part of your product, not just a backend service.” — https://whop.com/blog/embedded-payments/  ·  archive
4. “Embedded payments allow platforms to have tighter control over how money moves through their product, increasing revenue and reducing friction at checkout.” — https://whop.com/blog/embedded-payments/  ·  archive
5. “The Financial Conduct Authority licences payment service providers under the Payment Services Regulations 2017.” — https://www.ryftpay.com/blog/what-to-look-for-in-an-embedded-payments-provider-2026  ·  archive
6. “Providers operating without FCA authorisation in the UK create significant regulatory risk for marketplace operators.” — https://www.ryftpay.com/blog/what-to-look-for-in-an-embedded-payments-provider-2026  ·  archive
7. “The European Parliament and Council of the EU reached provisional political agreement on PSD3 in November 2025.” — https://www.ryftpay.com/blog/a-guide-to-psd2-in-2026  ·  archive
8. “Final texts are expected in the Official Journal in Q2 2026, with enforcement anticipated in 2027.” — https://www.ryftpay.com/blog/a-guide-to-psd2-in-2026  ·  archive
9. “SCA requires payment verification using at least two factors: something the customer knows, has, or is.” — https://www.ryftpay.com/blog/a-guide-to-psd2-in-2026  ·  archive
10. “SCA exemptions exist for low-value transactions below €30 and for recurring payments where SCA was applied at the point of setup.” — https://www.ryftpay.com/blog/a-guide-to-psd2-in-2026  ·  archive
11. “SCA exemptions exist for low-value transactions below €30” — https://www.ryftpay.com/blog/a-guide-to-psd2-in-2026  ·  archive
12. “When a customer makes a payment, the transaction is authorized by the issuing bank, routed through the card network and acquirer, and processed by the payment provider.” — https://whop.com/blog/embedded-payments/  ·  archive
13. “PSD2 introduced the commercial agent exemption, which allowed some platforms to operate without a licence by acting solely on behalf of one party. That means either the buyer or the seller, not both.” — https://www.ryftpay.com/blog/a-guide-to-psd2-in-2026  ·  archive
14. “When a marketplace holds buyer funds before releasing them to a seller during an escrow period, those funds must be held in a designated safeguarding account, separate from the platform's own operating funds.” — https://www.ryftpay.com/blog/a-guide-to-psd2-in-2026  ·  archive
15. “A customer pays $100 on a marketplace.→ $90 can be routed to the seller→ $10 goes to the platform as a commission” — https://whop.com/blog/embedded-payments/  ·  archive
16. “Over 92% of SMBs worry about payment loss, and 80% of businesses were targeted by payment fraud last year—risk that marketplaces should not absorb.” — https://www.liquidtrust.io/blog/five-lessons-marketplace-compliance  ·  archive
17. “Over 92% of SMBs worry about payment loss, and 80% of businesses were targeted by payment fraud last year—risk that marketplaces should not absorb.” — https://www.liquidtrust.io/blog/five-lessons-marketplace-compliance  ·  archive
18. “Choose rails and partners with 200+ country coverage, SOC 2 controls, and bank‑grade custody so international payouts are routine—not special projects.” — https://www.liquidtrust.io/blog/five-lessons-marketplace-compliance  ·  archive
19. “"Modern consumers are less likely to wait, as they expect instant and simple-to-use transactions. They have little tolerance for convoluted processes or fragmented user journeys that require several steps to complete a financial task."” — https://whop.com/blog/embedded-payments/  ·  archive
20. “Ryft holds FCA Licence.” — https://www.ryftpay.com/blog/what-to-look-for-in-an-embedded-payments-provider-2026  ·  archive
21. “The best embedded payment solutions for marketplaces are Ryft, Stripe Connect, Adyen for Platforms, Mangopay, and PayPal for Marketplaces.” — https://www.ryftpay.com/blog/embedded-payment-marketplaces-guide-and-uk-comparison-2026  ·  archive
22. “Volume-based pricing typically saves up to 70% compared to Stripe,” — https://www.ryftpay.com/blog/embedded-payments-explained-a-complete-guide-for-2026  ·  archive
23. “Embedded payments are now standard infrastructure for UK marketplace platforms.” — https://www.ryftpay.com/blog/what-to-look-for-in-an-embedded-payments-provider-2026  ·  archive
24. “According to McKinsey's Embedded Finance report, global revenues from embedded finance could exceed $7T by 2030, with exponential growth projected across both consumer-facing and B2B platforms.” — https://www.fintechtris.com/blog/the-embedded-finance-playbook  ·  archive
25. “B2B payments alone represent over a $100T global market.” — https://www.fintechtris.com/blog/the-embedded-finance-playbook  ·  archive