A handful of wholesalers handle the majority of US retail equity and option orders. They pay brokers payment-for-order-flow, give customers price-improvement versus the nbbo, and keep the remainder of the spread.
Retail flow is attractive because it is mostly uninformed: small orders that do not predict the next move, and so are safe to trade against, unlike toxic-flow from professionals.
Example: quote 20.00 / 20.04. The wholesaler fills a retail buy at 20.028 (1.2 cents of improvement), a retail sell at 20.012, and pockets roughly 1.6 cents per round trip while paying the broker perhaps 0.1 cents. Scale that across billions of shares a day.
Related: internalisation, payment-for-order-flow, price-improvement, adverse-selection, toxic-flow