Why TikTok Shop should be seen as a platform infrastructure success story, not just a social commerce phenomenon

By Alex Taylor, UK Managing Director, Mangopay

TikTok Shop has rapidly evolved from a discovery feature into one of the fastest-growing ecommerce channels. According to Retail Economics, more than half (56%) of UK consumers have already made a purchase directly through social media, via live streams, creator content and short-form videos, rising to 73% among those under 45.

Much of the discussion around TikTok Shop has focused on its ability to generate viral products and influence consumer behaviour. From beauty products selling out overnight to the recent surge in demand for Labubu toys, headlines tend to centre on the power of creators and algorithm-driven discovery. But behind every viral purchase is a far less visible success story: the payments infrastructure that enables these platforms to function at scale.

The UK social commerce market is forecast to more than double in value from £7.4 billion in 2024 to almost £16 billion by 2028. As social commerce matures, platforms need to maintain the same high standards of user experience while managing complex payment flows behind the scenes.

The evolution of social commerce demonstrates that payments are no longer simply the final step in the purchasing journey. They are a critical factor that determines whether a platform can scale successfully by meeting the demanding needs of consumers, sellers and third parties.

From traditional to more complex payment models 

Traditional payment models were built around relatively straightforward merchant-to-customer transactions. A consumer purchases a product, a seller receives the funds, and the transaction is complete.

Today’s platform economies are far more complex. A single purchase on TikTok Shop can involve multiple stakeholders: the customer, the marketplace, the merchant selling the product, the creator promoting it, logistics providers, and even affiliate partners. Rather than a single payment, one transaction may trigger multiple fund movements, commissions, platform fees, reserves, refunds and payouts.

This creator-led commerce model is exposing the limitations of traditional merchant payment systems. Conventional payment acceptance solutions were designed for linear transactions rather than for managing funds across multiple parties at the same time or supporting the speed and flexibility that modern platforms require.

Take a live shopping event as an example. A creator may sell hundreds or even thousands of products within minutes. The platform needs to capture payments instantly, calculate commissions, allocate revenue shares, hold funds where necessary, and release payments to sellers according to agreed settlement schedules. If customers later return products, those payment flows must be adjusted so the refund is handled correctly, without disrupting payouts already made to other participants.

The same complexity exists across marketplaces such as Etsy, Vinted and Depop, where platforms facilitate transactions between millions of independent buyers and sellers rather than acting as the merchant themselves. As platform business models continue to evolve, payment infrastructure must evolve alongside them.

Why wallets have become the foundation of modern platform commerce

This growing complexity has accelerated a shift towards multi-party wallet-based infrastructure. Rather than treating each payment as an isolated transaction, digital wallets allow platforms to operate a range of functions between stakeholders. Funds can be received, securely held, allocated between different participants, transferred and reconciled, all within a single infrastructure.

This delivers several important advantages.

First, wallets enable platforms to balance sophisticated multi-party payment flows without introducing more friction. Sellers receive their earnings more quickly than they would to a bank account; creators can be paid automatically based on predefined rules; and marketplaces maintain greater control over settlement and compliance requirements.

Second, wallets give platforms more flexibility in how funds are managed. Instead of transferring every payment to a seller’s or creator’s bank account, platforms can maintain balances that simplify refunds, reduce failed payment scenarios and enable faster customer reimbursements. This becomes particularly valuable during periods of exceptionally high transaction volumes, such as viral product launches or major promotional events.

Finally, wallet infrastructure supports the growing expectation for real-time experiences. Sellers expect rapid access to earnings, creators want timely commission payments, and customers expect refunds to be processed quickly. Delivering all three at the same time requires infrastructure capable of moving funds between multiple accounts while supporting compliance requirements and financial security.

In many ways, the payments layer has become just as important as the customer experience layer. Consumers may never see it, but its performance directly influences trust, retention and platform growth.

What the rise of social commerce means for marketplaces, creator platforms and the future of digital payments

TikTok Shop illustrates a broader transformation taking place across the digital economy. While social commerce may have accelerated the trend, the underlying infrastructure challenges are now shared by marketplaces, gig economy platforms, travel businesses, creator platforms and B2B ecosystems alike.

For platforms operating in these interconnected environments, success will depend less on simply accepting payments and more on the ability to manage how money moves between multiple parties. Wallet-based infrastructure enables platforms to embed payments directly into their operating model, giving them more flexibility, visibility, and control over fund flows and the opportunity to scale without adding operational complexity.

For the wider payments industry, this represents a significant shift in priorities. The competitive advantage is no longer solely about fast and secure transaction processing; it is about providing the financial infrastructure that enables entirely new business models to operate.