What Are C2C Payments?

In a typical C2C transaction, both parties are acting as private individuals. They may arrange payment directly, or a marketplace, classified-ad platform, wallet, banking app, or money-transfer service may facilitate the exchange.

C2C and person-to-person (P2P) are often used as if they mean the same thing, but the distinction is useful. P2P describes the movement of funds between people, such as splitting a restaurant bill or sending money to a relative. C2C usually involves a purchase from an individual seller. A C2C purchase might use a P2P transfer, but it can also involve a separate marketplace checkout and payout process.

How a C2C Payment Flow Is Structured

There is no single C2C processing model. On a marketplace, the flow may look like this:

1. The buyer selects a payment method and confirms the purchase.
2. The platform, its payment provider, a merchant of record, or the seller records or receives the buyer-side payment.
3. The relevant parties apply identity, fraud, sanctions, and transaction controls according to their roles and obligations.
4. The seller becomes eligible for payout under the platform’s release and settlement rules.
5. Funds are sent to the seller through the selected payout rail.

The collection and payout legs may use different methods. A platform might collect by card and pay the seller by bank transfer, or accept an account-to-account payment and credit a wallet balance. Confirmation, settlement, returns, and disputes follow the rules of each underlying rail.

Operational Considerations for Marketplaces

A platform needs to define who accepts the buyer’s payment, when the seller is owed funds, how fees are deducted, and who handles refunds or disputes. Seller verification, payout failures, reserves, delayed release, and reconciliation across both transaction legs can all affect the operating model.

Holding funds until a delivery or release condition is met should not automatically be called escrow. Escrow can have a specific legal meaning and may require a licensed structure in the relevant jurisdiction.