Challenge

With its treasure trove of secondhand designer furniture and art, Whoppah is on a mission to make it easy for shoppers to buy high-quality, affordable used items online. When Whoppah launched in 2019, Payment Services Directive 2 (PSD2) regulations had just come into effect, so digital marketplaces like Whoppah were not allowed to receive payments from buyers on behalf of sellers. Whoppah needed a payment system that could handle the complexity of marketplace transactions and reduce compliance issues.

“As a marketplace, PSD2 meant we had specific requirements when searching for a payment provider,” explains Martijn Leenaers, CFO, Whoppah. “We knew we wouldn’t be able to handle funds ourselves, so we needed a payment service provider that could receive the funds at one end and direct them to the seller at the other, while distributing the revenue from each transaction to us.”

Whoppah also had ambitions to grow the business and expand into new regions with their own payment preferences, such as Germany, where PayPal is the most popular online payment method. Whoppah therefore needed a payment system that would allow it to add new payment methods quickly and to easily cater to the local payment preferences in each new territory, helping make the path to conversion as smooth as possible.

Solution

Whoppah implemented Stripe in 2019, identifying two key Stripe products that could fulfill its need for a sophisticated payment system designed for marketplace transactions:

• Stripe Payments lets Whoppah add new payment methods quickly and easily, both in response to customers’ preferences in existing regions and to support its expansion into new territories.
  
• Stripe Connect manages the flow of payments from buyers to sellers and third parties, in compliance with local payments law, leaving Whoppah time to focus on developing its business.
  

“Stripe was by far the best fit in terms of ease of implementation, the number of payment options that were already integrated into the platform, and of course, the price,” says Leenaers. “We also knew that with our growth ambitions, Stripe would still be the best fit in five years’ time.”

Results

Compliant marketplace payments with Stripe Connect

Whoppah’s implementation of Stripe took just two months. Now, Stripe Connect handles the complexity of Whoppah’s marketplace payments, with funds automatically divided between the seller and Whoppah once the buyer has received their goods. Whoppah’s one million customers can now enjoy a smooth payments experience, making it easier for them to shop online for an Eames chair or an eye-catching print.

Stripe Connect also supports all compliance requirements (such as handling all customer funds) as required by PSD2, and processing KYC verification of Whoppah’s sellers. Whoppah can now concentrate its time and resources on building its business, knowing that Stripe is ready to handle future regulatory requirements.

“I can already see the potential for Stripe to help us comply with the DAC7 marketplace reporting requirements, which are coming into force,” adds Leenaers. “With Stripe Connect, we no longer need to worry about these things.”

Expanding internationally with local payment methods and PayPal

With Stripe Payments, Whoppah can easily add new payment methods, like PayPal, favored by customers in the territories in which it already operates, reducing the number of obstacles to conversion. Whoppah began its operations in the Netherlands and Belgium, and it used Stripe Payments to offer more payment methods to customers in these countries. In the Netherlands, Whoppah added the iDEAL payment method, with which approximately 70% of all online payments in the Netherlands are currently made. In response to feedback from its Belgian customers, Whoppah also added the popular Bancontact payment method.

When Whoppah expanded into the German market in 2022, it joined Stripe’s pilot PayPal integration for Germany in August 2022, and within two weeks it was able to accept PayPal payments in the country.

“Stripe’s PayPal integration really helped us conquer the German market,” explains Leenaers. “In nine months, we were able to grow to a level that took us two and a half years to reach in the Netherlands. Around 75% of that growth was because we were able to add PayPal as a payment method there.”

Whoppah’s average order value has increased by 15% over the past year, thanks in part to its ability to offer new payment methods to suit its customers’ requirements. Because it takes less time and effort to add new payment methods, Whoppah can focus on adding extra features to its marketplace.

With Whoppah now looking to expand into France and Italy, it’s already looking at which payment methods to add to suit local buying behaviors. The company is also considering adding digital wallets for buyers and sellers to make the shopping experience even smoother.