The gig economy and creator platforms that power digital commerce depend on one critical promise: pay sellers correctly and on time. Break that promise, and talent migrates to competitors who can deliver.
Yet, cases of accounts hijacked, payments redirected, and other costly gaps during transactions are growing. Why?
While marketplaces have invested millions in buyer fraud prevention and user acquisition, seller payouts are still largely unverified. Most platforms simply accept whatever bank details sellers provide.
Malicious actors are actively exploiting this massive vulnerability. On the other hand, disruptions during legitimate payouts are ballooning operational costs.
With regulatory compliance, customer trust, and millions of dollars at stake, both marketplaces and their payment service providers have a pressing need to address the blind spots in payout processes.
The Payout Crisis Is Here and Now
Fraudsters are increasingly targeting the payout sides of marketplaces, realising they usually have the weakest verification protocols.
Payment fraud losses in the UK alone totalled £1.17 billion in 2024. Business Email Compromise (BEC) attacks have exploded, with Vendor Email Compromise (VEC) attacks alone rising 66% over the first half of 2024.
The same pattern repeats across different types of marketplaces: legitimate seller accounts get compromised, payment details get changed, and platforms discover the fraud only after sellers contact support, asking where their money went.
Online marketplaces aren’t optimistic about change. In a survey of marketplace platforms, including Amazon, eBay, Facebook Marketplace, Temu, and Walmart, 71% reported that they believed the cost of fraud would increase in 2025.
The impact of fraud extends beyond fraud and risk teams, also harming finance and revenue, compliance and legal, customer satisfaction, and payments teams.
Beyond fraud, weak payout verification creates regular operational problems:
- Failed payments trigger costly reprocessing fees.
- Increased support tickets drain customer service resources.
- Sellers experiencing payment delays are dissatisfied, lose trust, and migrate to competitors.
- Regulatory scrutiny (and its consequences) increase when platforms can’t demonstrate proper verification controls.
Whether fraudulent or accidental, each misdirected payment damages the platform’s core value to buyers, sellers, and investors — every stakeholder that drives a platform’s value.
Why Are Marketplace Payouts Vulnerable?
Marketplace payout systems are built for scale and speed, not verification. Platforms often check format requirements, but not whether the account actually belongs to the person claiming it.
This creates fundamental weaknesses at three junctures:
- Initial Onboarding
Platforms verify seller identity through documents and business registration, but rarely confirm that the provided bank accounts match those verified identities. A legitimate business registration can be paired with another entity’s bank account.
- Change Request
When sellers request banking detail updates, most platforms send email confirmations and require authentication. But if the seller’s email is compromised, fraudsters control the entire verification chain.
70% of UK companies still use manual verification methods, such as callbacks and email-based validations. For sophisticated hackers, these are their prime targets.
- Cross-Border Transactions
International sellers introduce new verification challenges. Different countries have varying account number formats, business name conventions, and regulatory requirements.
What passes basic validation in one market might be completely illegitimate in another, but platforms often lack the infrastructure to verify accounts across multiple jurisdictions.
Why Marketplaces Need Confirmation of Payee (CoP)
Confirmation of Payee (CoP) takes marketplace operations from hoping payments reach the right accounts to knowing they do. CoP verification works by checking the name on the receiving bank account against the name the platform has on file before releasing any funds.
For marketplaces, this means instant verification that a seller’s bank account is actually registered to them, and not someone who compromised their account. When they update their banking details, CoP confirms the new account matches their verified identity. For affiliate commissions, platforms can easily verify that the account belongs to the registered influencer.
The UK’s CoP implementation proves the concept works at scale, increasing regulatory pressure to adopt safe, successful verification solutions.
Over 300 payment service providers have implemented CoP, completing more than 2 million verification checks every day. Since CoP’s introduction, cases related to misdirected payments, both fraudulent and accidental, have reduced by nearly 60%. As an officially mandated framework, coverage now extends to 99% of all UK CHAPS and Faster Payments, demonstrating how quickly verification can become the standard.
The European Union follows with mandatory Verification of Payee (VoP) requirements. All payment service providers (PSPs) in Euro area Member States must implement VoP by October 9, 2025. Non-Euro area PSPs have a later deadline, in July 2027.
For global marketplaces, CoP provides the verification infrastructure to support trusted payout relationships across jurisdictions. In June 2025, FATF revised Recommendation 16 (Payment Transparency), requiring financial institutions to use new tools that protect against fraud and error, including verification of recipient banking information.
Payment service providers and marketplaces need CoP in every sense of the word — to protect users, to grow businesses, and to comply with new regulations.
How obconnect Solves Payout Verification for Marketplaces
obconnect brings enterprise-grade Confirmation of Payee capabilities to marketplace operations, performing real-time account name verification before funds are released and catching account mismatches that signal potential fraud or error.
Its flexible integration options are designed for platform scale, working seamlessly with existing payout systems. Platforms can implement batch verification for scheduled payouts, real-time API checks for instant payments, or portal-based verification for manual review cases.
This flexibility means marketplaces can add verification without rebuilding their entire payment infrastructure.
The solution’s use cases cover a wide range of industries and platform types:
- For sellers at marketplaces like Etsy, payments reach legitimate business owners rather than account hijackers.
- For gig workers at TaskRabbit, it keeps their earnings protected, even if their account is compromised.
- For creators and influencers using Patreon, they never miss out on subscriber payments.
- For cross-border transactions on UpWork, international recipient details are verified, preventing costly misdirected payments across jurisdictions.
- For hosts offering vacation rentals on Vrbo, there’s an assurance that high-value transactions always go to the verified property owners.
obconnect’s track record proves its solution’s reliability. As part of the PayPoint Group, they already provide bank-level verification capabilities to over 300 financial institutions and corporates across the UK, processing millions of verification requests without disrupting existing payment flows.
Platforms Need To Act Now
Marketplace fraud is accelerating, destroying the trust-based relationships that drive marketplaces, gig economies, and digital commerce. Without secure, immediate payment verification, users are quick to leave. The verification infrastructure that seems optional today will become mandatory tomorrow, as regulatory pressure builds globally.
Platforms like marketplaces are about trust. For a user, all other points of comparison begin after excluding untrustworthy platforms. While a lack of trust can harm you, being consistently reliable drives all growth.
obconnect makes that possible, with proven Confirmation of Payee technology, flexible integration, and built-in regulatory compliance.
