The secondhand marketplace blamed the decision on the “unacceptably high fees” Amex charges for processing credit card transactions
eBay will no longer be accepting direct payments from American Express credit cards from August.
The secondhand marketplace blamed the decision on the “unacceptably high fees” Amex charges for processing credit card transactions. The change will kick in globally from August 17. The National Retail Federation says the average fee to accept a credit card is around 2%, but they can go as high as 4% for premium rewards credit cards like Amex.
eBay said that payment processing costs should be declining due to “technological advancements” but they are continueing to rise “unabated” due to “lack of meaningful competition”. The spokesperson also noted that there was a need for “robust regulations to drive greater competition to credit card networks and help reduce transaction processing costs for merchants and their customers.”
The statement added: “eBay customers are being notified about this upcoming change to prepare them for a smooth transition starting August 17 to the variety of popular, relevant, and secure payment options available on our marketplace. Based on research, we know that the vast majority of eBay customers are willing to use alternative payment options to continue enjoying buying and selling on our marketplace.”
eBay says it has around 132million active buyers using the platform worldwide, sells across 190 markets and “fuels small business growth, creating economic opportunity for communities.”
In 2022, it was estimated that there were over 133 million Amex cards in circulation globally and according to net e-commerce sales for 2020, Amex was the fourth most popular method of payment, after Visa, Mastercard and PayPal. In a statement, American Express said it was “disappointed” and criticised eBay for limiting the payment choices customers have when shopping on the website. The company added that in the US, the cost of acceptance for Amex is “comparable” to what eBay pays for similar cards on other networks.
A spokesperson said: “We find eBay’s decision to drop American Express as a payment choice for consumers to be inconsistent with their stated desire to increase competition at the point of sale. Additionally, eBay represents less than 0.2% of our total network volume. American Express Card Members can continue to use their Cards with millions of merchants around the world.”
Martin Lewis’ Money Saving Expert (MSE) website noted that you will still be able to use Amex on eBay if you check out using Paypal. However, the website warned that doing this could mean you lose “lose valuable extra protection.”
It said: “But BEWARE of doing this with larger purchases, as it could mean you lose out on the valuable legal protection you get under Section 75 of the Consumer Credit Act 1974. Section 75 states that if you pay for something costing over £100 and less than £30,000 on a credit card, the card company is jointly liable with the seller if something goes wrong.
“Crucially, for a purchase to be covered by Section 75, there has to be a direct link between you, the credit card issuer, and the place you bought it from – and, in some cases, using PayPal can break this link. The exact rules are complex.”
The MSE team said that eBay will continue to accept Mastercard and Visa credit cards after August 17 2024 and using these would get you the Section 75 protection when paying directly.
