The new eBay payments Adyen system will mean a move away from PayPal over the next few years as they start using Adyen as a payments platform. And the shift offers eBay a big opportunity to offer a real terms fee cut to marketplace merchants. But will they take it?
As it stands you pay fees on listings and subscriptions usually, and then Final Value Fees (FVFs) when you sell on eBay and then you also pay processing fees to PayPal too. Depending on your volume, you’ll pay a percentage fee and a fixed fee for every payment. You might also be charged foreign exchange fees and also, maybe, a fee to get your money. Depending where you are in the world.
The “double dipping” of fees is a hangover from when eBay and PayPal joined together back in the day. They simply kept both sets of fees for commercial reasons, and that irked many at the time. And, frankly, it still looks wrong. Amazon intermediates payments and doesn’t charge close to the same fees in reality.
eBay has liberally used the term “intermediate” to describe the new arrangement. That means that they in future, not PayPal, will be in the midst of the payments processing. PayPal will be available to sellers and buyers but not as the primary provider, and as we’ve noted, monies from buyers will be disbursed directly to seller bank accounts, and not via PayPal.
So, as the divorce becomes serious, and eBay processes marketplace payments itself, hopefully the payments fees will become redundant. Yes, eBay wants to take fees from payments and expects that payment fees will add $2bn to revenue and $500m to profits, according to CEO Devin Wenig. But even with that in mind, it could still be cheaper for merchants. And Tamebay urges eBay to consider the total take from merchants: not just selling fees in isolation.
The move to the eBay payments Adyen system offers an opportunity to provide a fee cut to merchants selling on the marketplace. A fee cut, almost unheard of at eBay, will be welcome and help revitalise the marketplace in the face of stiff competition from Amazon and others. It’s an opportunity they must grasp.