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Here is an email I just got about 30 minutes ago. Interesting. Wonder if they plan on eventually using this new payment processor in all places other than the Marketplace.
Dear mdcconcepts,
eBay is happy to announce plans to further improve the customer experience by intermediating payments on our Marketplace platform. In doing so, eBay will manage the payments flow, simplifying the end-to-end experience for both buyers and sellers. We have signed an agreement with Adyen, a leading global payments processor, to become our primary payments processing partner. PayPal, a long-time eBay partner, will be a payments option at checkout for eBay buyers.
You do not need to take any action at this time. The transition to full payments intermediation will be a multi-year journey.
Over the past three years, eBay has transformed its business to drive the best choice, most relevance and most powerful selling platform. Building out our payments capabilities is the next step in that strategy.
Payments intermediation will bring significant benefits for eBay sellers. You can expect a simplified pricing structure, more predictable access to funds, and most sellers can expect their costs of payments processing to be reduced. We’re also working on ways to provide sellers a central place to track and manage their business, which can soon include payments information.
By offering buyers more choice in how they pay and expanding payment options into more geographies, eBay believes sellers will be able to reach more buyers and improve conversion.
The transition to full payments intermediation will be a multi-year journey. eBay will begin intermediation on a small scale in North America starting in the second half of 2018, expanding in 2019 under the terms of the Operating Agreement with PayPal. In 2021, we expect to have transitioned a majority of Marketplace customers to the new payments experience.
Again, you do not need to take any action at this time. As eBay gets closer to the initial phase of its intermediation efforts, we will share more details about this process and next steps for sellers. In the meantime, please read the eBay Inc announcement for further information. For any immediate questions or to share feedback, please email paymentsinfo@ebay.com.
We’re looking forward to what’s next, and to getting there with you.
As always, thank you for selling on eBay.
Bob Kupbens Laura Chambers
VP, B2C Selling VP, C2C Selling
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Wow, this is pretty big news.
https://www.recode.net/2018/1/31/16957212/ebay-adyen-paypal-payments-agreement“One would assume, then, that there’s a good chance that eBay is taking an equity stake in Adyen alongside the commercial agreement so it can benefit from the upside this will create. For now, the company isn’t saying if that’s the case. It’s fair to wonder if Adyen had to make any financial concessions to win the business of a platform of eBay’s size.”
So I guess eBay is seeing that it can make more profit by owning the payment system again since there’s no incentive to give Paypal the profit.
The big risk is just getting buyers to use this new system. I had never heard of Adyen till two minutes ago. Maybe eBay will make the transaction cost cheaper for sellers to incentivize the switch?
Most important to us:
“In 2021, we expect to have transitioned a majority of Marketplace customers to the new payments experience.”So we’re 2-3 years out.
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But they said they will do a phase in and I think somewhere it said starting it do some phase ins starting end of 2018. So, as AdventureE states above, we know how well Ebay handles transitions [i.e. Linda Shields issues, our issue of Ebay using our previous Sale Price as the the newly listed price, 5 reps giving 5 different answers to the same question and tons of others].
So Jay since coding is going to be involved I would think we could start to see them “tinkering” with it by the end of this year and then phased in over the next few years. Which in my opinion means issues over the next few years.
Oh well, as we all do, “adapt” as we go.
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This message is so perfectly written in the worst kind of business jargon… and so couched in the reassuring blandness of therapy-speak… that its meaning is almost, but not quite, totally obscured.
I think (as Jay and everyone else has already said) that the tl/dr is that they’re downgrading Paypal to an “option” (you’ll have to leave the eBay site to use Paypal) and using this “Adyen” (<–netherlands based company) as the primary on-site payment method in order to keep more money for themselves. In searching for information about Adyen, I got a news alert that Paypal shares are down 10% on this news.
Right now, for me, it’s just something else to let wash over me like a gentle wave. 😉
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your instinct is good on this Hab–at any rate ebay is NOT doing this out of the kindness of their heart, LOL. I honestly have never had one problem with paypal and I have had their card since day one. ON etsy you stay on the same page to pay by credit card or paypal–so any other argument from ebay about security and convenience is nonsense IMO
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eBay Inc. official announcement:
https://www.ebayinc.com/stories/news/ebay-to-intermediate-payments-on-its-marketplace-platform/I wonder if the reference to “more geographies” means China…
https://www.adyen.com/knowledge-hub/country-guides/china-payments-guide -
This is a business and marketing strategy. As they state, buyers will not have to leave the platform
(go through another sign in and/or company experience) which will hopefully lead to increased conversion rates for ebay and its’ sellers. Anytime there is something between a buyer and checkout,there exists a possiblity for loss of sales because some buyers will not complete the process. In addition, any delay in seller’s getting their money can lead to unhappy sellers causing more time spent with customer service reps and even the possible loss of sellers. While ebay is going to keep PayPal as a payment option, it is probably only during the transition process and shortly after. They know getting rid of PayPal immediately will cause multilayered distruptions and they are currently legally bound to them because they have contracted with them until 2021. Most likely, PayPal (as long as the new payment system is phased in correctly and working) will be phased out.This is also a chance for them to gather more data on sellers – most likely similar data given to PayPal.
“As eBay transitions to a fully intermediated platform, it will work closely with its sellers to ensure that its new payment capabilities reflect their needs and deliver value to them.
To enable payments in their eBay accounts, sellers should expect to provide eBay with some additional payments-related data and transition to a new relationship with eBay that includes integrated payments capabilities.
Sellers will be required to complete these steps in order to continue selling on eBay, and it is anticipated that this transition for sellers will occur no later than one year after the expiration of eBay’s Operating Agreement with PayPal, i.e., by July 2021.” -
I wonder if this will address the issue of buyers having two different business entities that they can approach to get a refund – try ebay first, then paypal.
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Sharyn,
ebay–the company—includes StubHub (the ticket site), various Classified ad sites in many different countries, and the ebay Marketplace sites (not just ebay US, but UK, Germany, Korea, etc). In some of those Marketplace sites, ebay already does something like this, so it won’t be entirely new to them.
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My thoughts are that they want to expand vertically and get into the financing space. GM and Ford make more financing cars than they do making cars.
My hope would be that this is kept a separate division with their own programmers and not commingled with the platform programmers. My trust right now on the eBay programmers is low, especially after the last few weeks.
I can see how they will entice sellers, by offering lower fees. The question will be how they entice buyers to use this new platform vs. PayPal. It may be that they let buyers use credit cards directly on eBay (like we all do with Amazon) and eBay pays us out directly. So the buyer experience on eBay removes buyers from needing a PayPal at all. Buyers log on, enter their credit card, and buy. This would be my guess on their direction. Speeds up the buyer process…
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T-Satt: Think I saw that in one of their explanations of “Buyer Benefits”. That in giving the Buyer “Options”, the option would be use PayPal or [and I am guessing to the jargon] “Ayden”, which means the payment of their choice, which would be their choice of credit cards, etc. But all is just speculation at this point and we all are on a “wait to see” basis.
Guess for now, we are all on the “business as usual” mode.
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From that article, I think it’ll take some time to make the big jump to this new processor because they have a contract with Paypal for two more years as their main processor.
“After the existing eBay-PayPal agreement ends in 2020, PayPal will remain a payment option for shoppers on eBay, but it won’t be prominently featured ahead of debit and credit card options as it is today. PayPal will cease to process card payments for eBay at that time.”
eBay is always looking for ways to make more profit (duh). Asking for more fees from sellers is not feasible right now, so why not claw back some money from the payment transaction? eBay made Paypal into a payment behemoth so they can do it with another company.
Plus, as others have said, they can make the transaction seamless if it’s all in-house.
Tsatt said: “Buyers log on, enter their credit card, and buy.” This would be good. -
This is very good news! The payments industry is very dynamic with a lot of innovation in the last few years. Paypal is a dinosaur in that space. Adyen has the ability to process 250 different types of payment methods (although we don’t know how many of those will be available to ebay buyers). US consumers are actually quite slow to adopt new payment methods. For example, many Asian countries have been using their phones at checkout for over a decade while US consumers are now just starting to do that. There are so many faster, safer and more convenient methods to buy online than using Paypal. Ebay is overdue in overhauling this area. Adyen will make if much easier for buyers around the world to buy on eBay. It will be a seamless checkout experience for buyers, they won’t know that adyen is the payment processing company in the background, just like we don’t know who Amazon’s payment processing merchant is in the background when we buy off of Amazon – (hint- it isn’t Amazon) . Some of Adyen’s other clients: Etsy, Uber, Neflix, Airbnb, Spotify. Adyen knows what it’s doing.
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My background is in Anti-money laundering regulations so I have done a lot of consulting at all types of payments-industry related businesses over the years.
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Thanks for posting this info. It helps quell any perhaps unnecessary worries that might’ve been the initial knee-jerk reaction to the news. (Which I had myself, even though it was quickly replaced with an “Everything changes” and “Let’s see what happens/business as usual for now” mindset.)
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eBay seems to have a shelf life with payment processors – the first was Billpoint, then they bought PayPal and merged Billpoint into it.
eBay shares were buoyed by PayPal, and they split it off. eBay must not have much equity in PayPal at the moment to want to get involved with another processor.
I know a lot of people who don’t like oddball payment systems for online purchases – hence why they trust various debit, credit card, or Apple/Google branded services. Hopefully eBay gets some trust around Adyen before it is the “preferred” or promoted option.
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Buyers won’t know that Adyen is the payment processor in the background, they will only see that they can pay for their ebay purchases using any number of methods of payment that Adyen will support for that buyer’s country. Right now buyers are limited to credit card (if a seller has its own merchant account and thus accept credit cards) or paypal. With Adyen a payer in the US will be able to pay using paypal, credit card, probably Google Pay, Venmo. In China the customer will probably have to option to use AliPay (very popular payment method there)). Australians will be able to use POLi (popular in Australia), Konbini in Japan, etc. Obviously all methods won’t be presented to every buyer in every jurisdiction. It will be so much more convenient to buyers everywhere. And as sellers we won’t have to worry about having accounts with Paypal, POLi, HyperWallet, etc. Our payments will get aggregated and paid out to us in a yet to be identified means. So likely not instantaneously like Paypal.
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“Our payments will get aggregated and paid out to us in a yet to be identified means.”
That is the one snag I am a little concerned with, but I can live with it. If we have to wait a week or two weeks to get paid, there are worse things in life.
If we were in business for ourselves, we would have to accept 30, 60, or 90 day terms (I’m seeing 120 happen as well). As an old Controller for a small company, I remember walking to our mailbox each afternoon saying “Big Money! No Whammys!”
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Yep. It could be a daily sweep to a bank account we set up, could be weekly or even 30 days – we don’t know at this point. It may necessitate a little more planning or budgeting on our parts but we’ll still be bringing in money just for flipping junk. I’m sure there is mass hysteria over on the eBay forums about it.
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I imagine they’d implement “one-click” checkout too, once they’ve got it on-site.
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I’m excited for this change. We take paypal for granted because we use it all the time. There are lots of people who find it an extremely daunting task. I’ve had several international buyers message me telling of their difficulty using paypal to make a purchase. The idea that ebay buyers can simply whip out their pay method of choice directly on ebay would be awesome!
Ebay is missing out on a TON of money not being a part of the payment process. Paypal is worth more than 2x what ebay is.
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Maybe we’ll get our wish and a credit card will be needed to make an offer and immediately charged when we sellers accept it.
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I was talking to my dad about this change. When he first used PayPal, his checking account was automatically selected as the first choice of payment. He didn’t realize this and was surprised that the money was automatically deducted from checking. He has avoided PayPal since. I think maybe he isn’t the only one.
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Oh yeah, many older people I know HATE that paypal wants your bank info in order to access the funds. They aren’t aware that Paypal is a major 100 billion dollar global business and still think of them as a shady scammer “internet thing”.
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Here is a CNBC article on the payment processing transfer over.
https://www.cnbc.com/2018/02/01/why-ebay-abandoned-paypal-for-a-smaller-european-competitor.html -
From what I understand Etsy uses Adyen as a payment processor for their direct pay. Payments are scheduled to deposit weekly into your business bank account. You can request an earlier deposit. I prefer PayPal deposits just for the ease of using my card and getting the cash back bonus, so I’ve kept a stand alone PayPal (grandfathered in) but most of my sales are paid through etsy direct pay. I’d say customers prefer it. It’s nice to be able to pay my sellers fees and shipping fees directly through Etsy Direct. I do wish I had the choice of leaving $ in there and having a credit card like paypal but that’s not an option since it’s just a payment processor.
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I got to keep my standalone on etsy as well and I am grateful to have it–for people who depend on daily sales and daily deposits through paypal this will take some adjusting to IMO. Ebay will make money on the interest from holding the cash until it is disbursed and that is why they are doing this no doubt.
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On etsy (who is using the same processor as ebay is going with) it works this way–all payments, including paypal goes through their processors, funds, on etsy at least, are released into your bank account on a schedule (which can be 24 hours although this will depend on your bank–the default is every monday) no more direct deposits into your paypal account (ebay gets the interest by holding your money of course) fortunately for me I got stand alone paypal grandfathered in at etsy, but I also use their integrated system–I am used to it and it doesn’t bother me, but I can’t believe that some ebay users won’t have paypal withdrawals when the new system starts kicking in in a few years. Forget the processor change it is the disbursement change that will be surprising I’d think.
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“it is the disbursement change that will be surprising I’d think.”
YES! I just opened an etsy store and was surprised and really annoyed that I had to provide them with my bank account information. I wish I could just use my PayPal account as the “bank” to which they deposit my funds. PayPal already has my bank account info – I don’t want anyone else to have it. Of course, I’ll adapt if/when necessary – but I just like having PayPal as my bank for Internet-related things.
As for the schedule of funds disbursement – I could probably get used to getting paid once a week, but yes, it would definitely be weird/annoying at first.
I ended up deciding not to get into etsy right now after all (too much for my brain to keep track of 2 different platforms).
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FYI on Etsy… the default is to be paid once per week, but you can change that to daily. We did.
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yes you can change it to daily but when it is in your account is still up to your bank–a deposit to mine takes 24 hours and obviously will not deposit on weekends, no matter what way you slice and dice it, the money will no longer be immedient like it currently is, I honestly think that some smaller sellers will be in for a shock. I am also concerned about the paypal loan program–this move by ebay could end it.
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From the little news we’ve heard so far, it sounds like eBay will always have Paypal as a payment option…just not their primary payment choice. So if you want to keep using Paypal only, it’ll be your choice.
Currently, I believe you can set it to only allow money orders or local pickup. This would be for the old timers who hate Paypal. Obviously the fewer payment options you allow, the less business you’ll get.
And I’d ask myself about my financial situation if I was always needing money every 24 hours. I’d hope any business/household could manage their money for a week at a time. I know Amazon was paying us on a 14-day schedule.
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Of course you will still be able to use paypal to buy stuff with, on etsy it is a choice alongside other card payments, the difference for sellers will be that the money paid via paypal goes to the processor and not straight into the seller’s account–Jay aren’t you being a bit hard on new sellers who might indeed need the money paid into paypal faster than a week of a couple of days? and like I said, I like the option of taking out a paypal business loan when I need one, this action by ebay will put the kibosh on that I believe. On Etsy more people choose to use their bankcards than use paypal.
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Sue, I guess we always play this game every time eBay announces a change. We have two options:
–complain about how bad it’s all going to be
–figure out how to adapt and change to keep running our business.
You know where I stand.Tsatt already said you can transfer the money each day on Etsy through this new processor:
http://bit.ly/2nDLCQw
That means even over a weekend, you get your money in less than three days.Yes, Paypal Working Capital wont be as useful if most of our money comes from this new processor. But who knows. Maybe eBay will create a new business loan program. Amazon has one.
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I’m assuming my questions/concerns/excitement are the same as most:
– What do the fees look like for sellers (more/less than PayPal?)
– If it makes it easier for new ebay buyers/customers, that’s great news. More potential sales.
– I’d prefer to not be on a set schedule like Amazon payments (ie every two weeks), but that’s generally about as often as I’m transferring out of PayPal anyway. It’s just nice to have the flexibility if a sudden need for funds pops up in the interim.
– Best offer/immediate payment/hold would be AMAZING.I’m neither worried, or excited about any of it yet. We’ll have to see how it all unfolds and what the pros/cons are, but there’s potential for dramatic improvements, and some crappy downsides as sellers too.
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I will say my final thing about this–Etsy has a similar scheme going as ebay proposes, I was able to keep standalone paypal, but in general, most customers use integrated payments, I don’t have an issue with Etsy holding payment until the default transfer or when I decide to ask for a transfer which you can do 24 hours ahead. It is no big deal to me, but I honestly think that some ebay sellers will be a little angry about it–people literally left etsy after this change so we will see. MY major platform has been Etsy for at least the last year, so I am used to this. I also think that most of the sellers that flock to this forum are more organized and involved in making the ebay business work even if it is a side gig, not so for all people who sell on ebay.
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I have read the official announcements and everything I have seen this far leads me to believe this is great news. Maybe in a few years a best offer will be immediately paid, and perhaps no more PayPal siding with a fraudulent buyer who skirts EBay taking hours of sellers time to fix. I think eBay does a really good job keeping the marketplace clean an remarkably honest- i trust EBay a lot more than PayPal to oversee the financial transactions.
With the increased platforms available for both buyers and sellers it makes a lot of sense that EBay would look for ways to yes make more money, but also lower costs to sellers overall. I don’t see any reason not to take EBay at their literal words in the announcement.
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Ah, this is a good point. If eBay is the marketplace and bank, then buyers cant go to Paypal when they dont like the result of a disputed case.
Ultimately, as long as people are buying on eBay (whether using paypal or this new service), it’s all good in my book. It all smells like continued freedom to me.
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ebay won’t be the bank, or at least not the only one involved. There’s always the bank that issued the buyer’s credit card, and buyer can always call their credit card company to report an unauthorized purchase. The question is how ebay/adyen will work together (or not) with the bank to resolve such issues.
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