EBay to axe major payment option used by millions of customers in just 10 days
EBAY is axing a major payment option used by millions of customers worldwide.
Shoppers browsing the online retail giant will no longer be able to pay for their orders with American Express credit cards.
The change, which starts on August 17, is a result of the “unacceptably high fees” Amex charges for processing credit card payments, according to eBay.
Amex fees can be as high as 4% and because of this, many retailers don’t accept the credit cards as a form of payment.
The National Retail Federation says the average fee to accept a credit card is roughly 2%, but it can be as high as 4% on premium rewards credit cards like Amex.
EBay confirmed the change will be implemented globally but did say that customers will have other ways to pay.
A spokesperson for eBay previously said: “After careful consideration, eBay has decided to no longer accept American Express globally effective August 17 due to the unacceptably high fees American Express charges for processing credit card transactions.
“At a time when payment processing costs should be declining because of technological advancements, investments in fraud capabilities and customer protections by merchants like eBay, credit card transaction fees continue to rise unabated because of a lack of meaningful competition.
“As consumers and small businesses are worried about inflation and rising costs, there is a need for more robust regulations to drive greater competition to credit card networks and help reduce transaction processing costs for merchants and their customers.”
In a statement, American Express said it was “disappointed” and criticised eBay for limiting the payment choices customers have when shopping on the website.
The company added that in the US, the cost of acceptance for Amex is “comparable” to what eBay pays for similar cards on other networks.
A spokesperson said it was “disappointed” by eBay’s decision and it will “limit customers’ payment choices”.
“Our research tells us that in the US the cost of acceptance for American Express is comparable to what eBay pays for similar cards on other networks.
“We find eBay’s decision to drop American Express as a payment choice for consumers to be inconsistent with their stated desire to increase competition at the point of sale.
It added that eBay makes up less than 0.2% of Amex transactions globally.
EBay said customers are being notified about the change and other options for making payments.
Amex customers will still be able to use their card to pay on eBay via Paypal.
It’s only direct Amex payments that are being axed, whereas you can set up Paypal to debit your Amex card.
But beware that if you do this you’ll lose section 75 protection.
Under the Section 75 law, consumers can claim a full refund for faulty goods or services bought on their credit card from their card provider if the retailer won’t pay up.
Top tips for selling on eBay
NEW to eBay? It's head of secondhand, Emma Grant, reveals how to optimise your listings:
- Use key words – eBay automatically filters listing titles for key words, so it’s crucial to use the terminology people search for – especially brand and product names.
- Choose the right category for your product – It might sound obvious but it’s important to always choose the most specific category to sell in.
- Pictures are important – Most users will not bid on items they cannot see. For best results, take photos in natural light against a neutral background and be honest about any scratches or damage to the item.
- Be as detailed as possible – Be honest about the condition of the product and be sure to note any wear and tear.
- Look at past sold items– eBay has a function that allows you to search for the item you want to sell and then filter the results by sold items. Here, you can view the price the item has sold for and get insight into how others have listed it.
- Selling Sundays – Get the timing right. The busiest time for buyers is Sunday evenings, so schedule your listings to end around that time. Opt for seven-day auctions to ensure the max number of bids. The longer your item is listed, the more chance of people seeing it, so unless it’s time-sensitive, pick seven days. December is the busiest month on eBay.
- Be realistic with pricing – Try searching for similar items on eBay, to make sure you’re going for the right price and always ask yourself “would I pay this price for this item?”
- Donate to charity – When listing your item, consider donating a percentage of the sale to a cause of your choice – from 10% to 100% – you can donate the funds raised from your item straight from the platform.
EBay isn’t the first retailer to ban the cards.
Costco stopped accepting American Express cards nearly a decade ago.
Greggs is another retailer which doesn’t accept the credit cards.
The change will come as a huge blow to Amex customers who use their credit cards to shop on eBay.
It is estimated that in 2022, there were over 133million Amex cards in circulation globally – and according to net e-commerce sales for 2020, Amex was the fourth most popular method of payment, after Visa, Mastercard and PayPal.
Retailers have to pay fees to card issuers like Amex, Visa and Mastercard.
Millions of people had their Visa debit cards replaced by Mastercards in 2021.
Customers of Santander, First Direct and Natwest were sent Mastercard debit cards to use with their current account.
But banks denied their decision was linked to fees charged by Visa and said it was to improve customer experience.
Meanwhile, Mastercard and Visa increased so-called interchange fees for online credit and debit cards for UK to EU transactions in 2022.
Cross-border fees increased from 0.2% to 1.15% for debit cards and 0.3% to 1.5% for credit card transactions.
On a credit card payment worth £100, the fee would rise from £1.20 to £1.50, while for debit cards it would go up from 20p to £1.15.
It’s not the only change eBay has brought in recently.
The e-commerce marketplace launched a shake-up in fees, meaning that those wishing to flog their second-hand fashion aren’t charged anything.
All charges including listing and final value fees now no longer apply to pre-owned fashion.
Pre-owned fashion includes items you have worn once, old favourites or brand-new items with tags on that you have just never got around to wearing or returning.
It’s important to note though that this change is just for second-hand fashion and not for selling other items like electronics or toys.
What charges do eBay sellers have to pay?
It’s free to list up to 1,000 items on eBay each month, after which you have to pay a 35p charge per listing.
However, sellers now have to pay a raft of fees if their item sells.
When the platform first launched in 1995, there were no seller fees at all.
After a couple of years, it began charging a small one-off fee, before it introduced a “final value fee” of 0.5% of the sale price in 1999.
Over time, the fees have gradually crept up and started eating into sellers’ earnings, as the cost of operating has increased with new regulations being introduced.
Fast-forward to 2024 and the platform now charges sellers a final value fee of 12.8% on the total sale price, which includes postage costs, plus a fixed 30p charge per item sold.
The final sale fee is reduced to 3% for earnings on a single item over £5,000.
Ebay’s new regulatory fee, which comes into effect today, will take its basic seller charges to 13.15% plus 30p.
Depop fully removed its 10% selling fee for users based in the UK.
From March 20, sellers listing items on the platform have received more money from each sale as the 10% selling fee for new listings was removed.
It will mean, for example, that those selling an item for £20, will no longer have £2 taken off the transaction amount to cover this fee.
Vinted, on the other hand, doesn’t charge users anything to list or sell their items, making it essentially free for sellers.
Instead, it charges buyers a “Buyer Protection fee” of 3-7% plus 30p-80p.
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