$2 billion GMV eBay Payments processed to date

$2 billion GMV eBay Payments processed to date

In the latest Investor earnings call there were some interesting snippets regarding eBay payments. To date, $2 billion GMV eBay Payments have processed by almost 25,000 sellers over the two year period eBay Payments have been running. That’s chicken feed in eBay’s terms with some $10.8 billion revenue annually, but it’s restricted due to the operating agreement with PayPal from their divorce in 2015.

eBay say that while their pricing has been discounted to reward early participation, to date, sellers have saved almost $10 million in fees, and they have more options on how and when they get paid.

At the end of 2019, eBay’s US volume approached the limit permitted under the operating agreement, while in Germany, they ramped from 0% to 3%, faster than our US ramp.

eBay state that they remain confident in realising an incremental $2 billion in revenue and $0.5 billion of operating income in 2022 which is good for investors, but if merchants are also saving money no one will complain, although we’re yet to see fees for UK merchants.

eBay say that they’ve seen no change in conversion for sellers offering eBay Payments but what they have seen is different user behaviour. Buyers now have more alternatives (e.g. Apply Pay), and sellers have a series of tools from which how to manage their payments and connect their payments with their listing activity, which eBay says makes it easier for them. Additional benefits as eBay Payments are rolled out worldwide is that buyers in different countries may well be offered different payment options automatically. If a UK sellers is selling to a US buyer they may be offered Apple Pay whilst from the same UK listing a German seller might be offered Direct Debit. This will all be invisible to the seller but should make global trading that little bit easier and remove friction for buyers.

eBay are limited in their roll out of eBay Payments until July 2020, which is why they’ve only seen $2 billion GMV eBay Payments processed to date. After July when the operating agreement with PayPal ends they state that they we will go hard, not only in the US and Germany rapidly expanding the number of sellers and the GMV in these two countries but will also expand into the markets.

With the UK being one of the top country sites in the world for eBay, we’re betting that once free of the shackles of PayPal eBay will move fast to get the UK switched over to eBay Payments. That means you should be prepared for an announcement any time over the summer with an expectation that eBay Payments will roll out rapidly in the UK.

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Would be interesting to see if the Tiered Payment rate (discounted rate for higher revenue sellers, as offered by PayPal) will see some form of replacement on eBay. eBay's initial Managed Payment rollout after July, will probably have the strong temptation of rolling out a standardised product (same rate). We'll see.

MS • 30th January 2020 •

eBay's GMV are fake numbers. It includes shipping paid by sellers, order cancellations, returns, and unpaid auctions. Anything that ends as a "sale" is counted. What percent does this reduce their real GMV? It's not a small number.

Dav • 30th January 2020 •

If that’s correct Dav then it’s a huge amount that should not be counted. I have heard that cars have as much as 50% no sale through rate, and our no sale percentages have gone through the roof in the antiques category with persistent non payment, buyers messing us about and silly returns. Obviously there is theft and lots of items not received cases, and ebays continued gouging of postage is shameful. Also we, as well as many fellow sellers, were caught out by the tiny automatically ticked realist box when we claimed our fees back for non payment.

Jonah • 30th January 2020 •