On their latest investor call, eBay say that they continue to see accelerated adoption of eBay managed payments in the US. Since the launch in late Q3 last year through the end of Q2, eBay have now processed over $636 million in payments for over 6,000 sellers participating to-date. Sellers on eBay managed payments are seeing good conversion and their buyers are able to pay using credit cards, Apple Pay, Google Pay and PayPal say eBay. Most sellers are saving on payment fees and they’ve simplify their experience with eBay by managing their business in one place.
Since the launch in September, eBay have intermediated $636 million of GMV and in just the last quarter alone eBay intermediated $273 million of GMV.
eBay buyers on their new platform are demonstrating their desire for increased choice. In June, they chose to pay with Credit Cards, Google Pay and Apple Pay approximately two-third of the time. On the buyer side it’s very interesting as now with PayPal rolled out buyers are still showing that they want choice. After PayPal has been rolled out penetration of PayPal is approximately 35% and that’s compared to almost double that on the rest of the marketplace. So buyers are voting with their wallets and they’re by and large not voting for PayPal.
Per listing costs for sellers not welcome news
The eBay run-rate of annualized GMV is now well over $1 billion as eBay continue to make steady progress toward their financial targets. But it’s not all good news for sellers. eBay managed payments comes with a $0.25 per listing charge compared with (in the US) a $0.25 payment processing charge. The difference is subtle but will significantly increase costs for sellers used to multiple item orders.
If your average order is for a single item from a single listing there will be little impact. There will also be little impact if your average order is for multiple items from a single listings. Those who will lose out are sellers who’s customer generally purchase multiple items from multiple listings as, when eBay tally up their fees, they’ll charge $0.25 for every listing a buyer purchases from in a single transaction. If a buyer purchases 10 items from 10 different listings then under eBay Managed Payments the cost will be 10 x $0.25 or $2.50 plus the percentage charge.
Germany the next eBay Managed Payments target territory
In Germany, eBay are on track and, subject to regulatory approval, intend to be live by the end of the year. You can expect to see eBay managed payments announced for the UK in the first half of 2020 with a roll out likely to be in the second half of the year.
eBay won’t be hanging about once their divorce agreement with PayPal expires next July – partly because buyers are obviously keep to embrace other payment methods on eBay but mainly because they have a target of $2 billion in revenue and $500 million in operating income once they roll out worldwide.