I was out with a friend yesterday and it’s becoming increasingly clear that mobile payments are the way of the world today. In her case it’s Apple Pay, but for other Google Pay. Pay in a shop, it was tap with Apple Pay, fill up with Petrol, Apple Pay again. Ordering on Just Eat was a “I haven’t got my debit card with me”. People today simply don’t carry cards and that’s one of the reasons to look forward to eBay Managed Payments when they eventually arrive around the world.
The current state of play is that just 6,000 sellers in the US are enrolled for eBay Managed Payments and $636 million dollars have been processed since it was rolled out in the Autumn of 2018. That’s tiny and all the sellers are currently based in the US. As a comparison, there are 200,000 business sellers in the UK not to mention millions of consumer sellers, so 6,000 sellers really is just a pilot project currently.
eBay Managed Payments won’t even be coming to the UK any time soon – it’s at least a year away. In the mean time eBay aim to roll it out in Germany later this year which is still subject to regulatory approval. Germany will be an interesting test ground as German consumers love direct debit and invoice payments – it’s a country where eBay can test multiple new payment methods before going worldwide.
The main reason for stalling is the operating agreement between eBay and PayPal from their divorce settlement – this limits how fast eBay can migrate away from PayPal but that expires in July 2020. From then on eBay Managed Payments will roll out rapidly around the world, including the UK, with Alyssa Cutright, VP, Global Payments, Billing & Risk at eBay saying that they are “on track to complete this multi-year, phased launch in our global marketplace in 2021“.
Will eBay Managed Payments save you money?
One of the big selling points of eBay Managed Payments according to eBay is the savings compared to PayPal charges. We’ve yet to see that for the UK with two major sticking points that we’d like to see resolved before a UK roll out.
1) eBay Managed Payments Fixed Fee
In the US there is a fixed fee of $0.25 but unlike PayPal where it’s a payment transaction fee, for eBay Managed Payments it is a per listing fee. Sell one item from one listing and it’ll make no difference. Sell several items from several different listings paid for as a single order and you’ll pay $0.25 for each listing the order consists of – 10 items from 10 listings would cost you $2.50 in fees rather than the $0.25 you might expect.
2) eBay Managed Payments rate vs PayPal Merchant Rates
Here in the UK, we are accustomed to PayPal merchant rates – eBay Managed Payments appears to be charged at around 2.7% and that’s lower than the headline 3.4% PayPal rate but higher than many are paying on the merchant rates. If you’re accustomed to paying in the region of 1.4% or 1.9% on your PayPal fees then you are facing a hefty increase if eBay don’t introduce a tiered rate before eBay Managed Payments rolls out in the UK… and you won’t have any choice, it will be enforced.
Single Sign on Security
eBay Managed Payments will be a single sign on to a single account and will end once and for all the tit for tat eBay blaming PayPal and PayPal blaming eBay when something goes wrong. It will eliminate the current spate of hackers stealing funds by changing the seller’s PayPal email address on eBay and this can’t happen soon enough.
What we will need is for businesses to strongly control who has access to their financial details on eBay. eBay Managed Payments may have been the impetus for eBay to as last roll out Multi-User Account Access so that businesses can give limited access to employees for specific tasks. Only a lunatic would trust their entire workforce with full access to their business finances and that’s effectively the state of eBay Managed Payments today. Businesses will need to use Multi-User Account Access or third party tools to separate their business finance from the tasks employees need to perform.
3 Responses
I have just returned from China which is increasingly becoming a cashless society dominated by WeChat Pay and Alipay. For most transactions scanning their mobile phone QR code is the norm including for street vendors, bike hire, restaurants and shops. We in the UK are a long way behind. It does make it harder for foreigners as you need a Chinese bank account to link to WeChat / Alipay so can’t be used, Visa and Mastercard are rarely accepted away from international hotels and if a vendor does accept cash they often do not have any change. I wouldn’t be surprised if PayPal isn’t targeted by WeChat or Alipay as a way into western markets for their technology in the future.
I don’t suppose there will be anything like PayPal Micropayments in this system? Has anything been said about this?
As my eBay sales often consist of multiple items in the £2 to £3 range I look like to face a double whammy here
“People today simply don’t carry cards” Don’t they?
I can get my wallet out of my pocket and tap the card on a machine a lot quicker than I can get my phone out, unlock it, activate the app and then do the same.
I always carry cards and would find it risky not to, what happens if your phone battery goes flat? It is bad enough that a bank could block your card and you only finding out when you go to pay, especially if you have had a meal or something you can not put back on the shelf.
We have a local bar that has just opened and gone cashless.