eBay have announced their application for regulatory approval to intermediate eBay Payments in Germany. Today we spoke to eBay Germany to find out more about their plans, but first a recap of the progress eBay have made.
“We continue to make good progress in our payments initiatives, adding sellers and intermediating more GMV, while our sellers continue to realize savings in payment-related costs…
…Our Q1 run rate of annualized GMV is nearly $1 billion. Our buyers are presented with more and more choices on how they want to pay on eBay’s based payment rails. Options now include most major credit cards, Apple Pay, Google Pay and PayPal as we progress towards our $2 billion annualized revenue and $500 million annualized operating income goals at scale.”
– Devin Wenig, President and CEO, eBay
eBay are limited on roll out speed
eBay are gated by the existing operating agreement with PayPal limiting them to putting up to 5% of eBay GMV through eBay Payments between July 2018 and July 2019, and 10% between July 2019 and July 2020 in two markets. This means that the announcement of eBay Payments in Germany will be the last for a while. It will be after July 2020 that new markets can be rolled out and we would expect the UK to be towards the top of their hit list at this time.
eBay are already close to 4% of U.S. GMV and it’s expected that they’ll be right up to the 5% limit by July when they get the flexibility to ramp up to 10% of GMV. eBay have a pipeline of sellers who have expressed interest in eBay Payments and can’t even onboard all of them at the moment due to the operating agreement gating. Interestingly the lack of PayPal in eBay Payments hasn’t appeared to limit sellers’ appetite for eBay Payments in the US.
Adding new payment methods
Having their own payments has given eBay a huge amount of influence over the means of buyer check payment at checkout and they’ve been able to add new payment mechanisms already such as Apple Pay and Google Pay, and there are many more coming in Germany. One of the reasons eBay chose German is that there are many, many forms of payment, direct bank transfer, direct debit, it’s a complicated market which is the reason eBay chose to launch eBay Payments in Germany as their second country site.
eBay Payments in Germany
eBay sellers in the UK will be interested in eBay Payments in Germany as the two country sites are relatively similar, although the German payments ecosystem have always favoured direct bank payments and were never fans of PayPal. With that in mind it’s no surprise that as well as credit/debit cards, PayPal, Apple Pay and Google Pay, eBay intend to launch Direct Debit eBay on Payments in Germany.
The idea is to streamline the buyer experience and eBay know that many payments are made off eBay for on eBay transactions. One of the important changes that will come with eBay Payments in Germany is increased levels of Buyer Protection which doesn’t exist when the payment is completed off eBay for an on eBay purchase. Up until now only payments via PayPal were covered, but moving forward all eBay Payments in Germany will in included in eBay protection programs. The real plus side for sellers is that if a buyer fails to win a case on eBay, with eBay Payments they can’t then go for a second shot at a gratuitous refund from PayPal.
eBay will ramp up slowly in Germany as they already have in the US and sellers will be able to express interest in early access. eBay will also be inviting sellers for whom they believe, based on previous trading history, eBay Payments in Germany will be a good fit. The program will be completely voluntary at the start so only sellers who see an advantage for their businesses need apply.
eBay reiterated that they expect fees through eBay Payments in Germany to be lower for the majority of sellers but weren’t able to share the exact fee structure with us yet. There will naturally be concerns from sellers who are on the more highly discounted PayPal business rates so this is a wait and see. The good news in the short term is that if eBay Payments in Germany would cost a seller more than their current arrangements they don’t have to sign up initially.
Sellers who want to sign up for eBay Payments in Germany can express their interest here.
eBay Payments in Germany proposition
eBay have published the following proposition for eBay Payments on Germany setting out the advantages for sellers:
More payment options for buyers
- Buyers can complete their order at any time in the same manner, and eligible purchases are covered by eBay Buyer Protection. This increases confidence and buyer satisfaction.
Lower costs
- On average, you will see lower processing fees for payments. The savings vary depending on your current payment processing fees and average selling prices. Most sellers can expect lower total costs.
Simple and transparent account management
- Account management becomes easier for you – everything you need to sell and pay is in one place. All sales and pay information can be found in your eBay account.
- Consolidated Billing: All fees for selling and payments are clearly and transparently displayed at a glance.
- You arrange for refunds to buyers eg for returns on the eBay platform.
Everything in one place
- For you, there is only one principle for seller protection and you clarify discrepancies and buyer protection cases in one place – on eBay.
- If needed, sellers get help from a centralized customer service.
One Response
Thanks a lot Chris. It makes clear indeed how very slow the implementation of this is.
Most euro bank transfers are free, and sometimes instant between accounts held by internet pure player banks. So eBay are now subjecting these to a fee based on the amount transferred, just as if sepa had never been created ?