Tamebay comment: The eBay payments Adyen system is an opportunity for fee cuts for sellers

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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.

9 Responses

  1. In reality what will happen is there will be no merchant fees…. but FVF will be hiked in another example of ebay looking after its sellers!

  2. for many sellers both eBay (inc whichever payments service one chooses) and Amazon charge up to 20% per transaction.

    with Amazon one has the extra privilege of paying them to ‘showcase’ one’s goods before they decide to buy them wholesale themselves and undercut whoever introduced the product.

    they are both useful as (paid for) advertising to the big wide world – nothing else.

  3. I doubt very much, given Ebay’s trend for increasingly aggressive fee hikes, that there will be any savings passed on to sellers at all.

    Best guess would be initial parity followed by stealthy increases in fees year on year after that.

    Biggest concern in the short term is Ebay’s appalling track record for system problems and errors. Are they going to get this RIGHT? Who wants lengthy delays, or worse still, funds going astray?

    Nobody from Ebay has indicated that fees will fall. Why would they? This is a golden opportunity to grow revenue without increasing sales on the site. Ebay’s clueless board will grab it with both hands, as well as constantly increasing dead fees, such as rentals and other fixed fees, not contingent upon selling anything.

    The ideal position for Ebay is to grow revenue whilst sales stay flat or fall. This ticks the box.

    Remember, this whole move to Adyen is entirely for Ebay’s benefit.

    There is nothing in this for sellers, apart from upheaval, so there is no point looking for any upside here.

    There isn’t one.

  4. eBay will not ever make a move to make us sellers any better off.
    They’ll be eyeing up the 20p transaction fee (which I notice from a Tamebay article recently that they’re actually starting to charge a fixed FVF + the % on one site or another so it’s already happening.
    They want the lot, it WILL NOT mean a saving for us, you can be 100% sure about that and even if in the short term we do see a reduction, it will come at a cost and will be taken away from us.
    I’m still reeling from having to pay £130 a month for our anchor shop, for what, the concierge service. What a load of rubbish, this Adyen is for one thing and one thing only ‘eBay will be intermediating payments’ Yes, I bet they will……

  5. You are all right, this is only going to benefit eBay! They wouldn’t do it if it wasn’t. Us sellers will not see any fee reductions, that’s for sure. Looking forward for onbuy to start using paypal i know that much!


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