Starting August 17th, eBay will no longer accept American Express (Amex) payments, citing “unacceptably high fees” associated with Amex credit card transactions.
This decision comes as part of eBay’s broader strategy to manage transaction costs and push for more competition in the credit card market.
In a notice to customers, eBay explained its stance, stating, “Credit card transaction fees continue to rise unabated because of a lack of meaningful competition. There is a need for more robust regulations to drive greater competition to credit card networks and help reduce transaction processing costs.”
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Despite this change, eBay will continue to accept other payment methods including Visa, Mastercard, Discover, PayPal, Apple Pay, Google Pay, and Venmo.
However, American Express has disputed eBay’s reasoning, arguing that its fees are in line with those of other credit cards accepted by eBay.
“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,” Amex said on its website.
The payment company also pointed out that eBay transactions represent less than 0.2 percent of its total network volume, minimizing the impact on its overall business.
Retailers and Credit Card Companies Amidst Fintech Evolution
This isn’t the first time a major e-commerce platform has had disputes with credit card companies over transaction fees. For instance, Amazon nearly dropped support for Visa credit cards in the UK in 2022 due to high processing costs.
In an email to customers at the time, Amazon stated, “As a result of Visa’s continued high cost of payments, we regret that Amazon.co.uk will no longer accept UK-issued Visa credit cards as of January 19, 2022.”
However, Amazon continued to accept Visa debit cards and other credit cards, including Mastercard and American Express.
After negotiations, Amazon and Visa reached an agreement in early 2022 to continue their partnership, highlighting the ongoing negotiations and adjustments companies make in response to transaction fee structures.
The Broader Financial Ecosystem
Visa has adapted to changes in the global financial ecosystem, including partnerships with blockchain-powered cross-border payment facilitators to integrate cryptocurrency payments. The cryptocurrency industry, with its decentralized finance (DeFi) system, has simplified and reduced the cost of cross-border payments, creating additional competition in the financial sector.
eBay’s decision to stop accepting Amex is seen as a strategic move to manage its transaction costs more effectively and advocate for regulatory changes to foster competition among credit card networks.
This change may inconvenience some eBay customers who prefer using Amex, but the platform’s acceptance of a wide range of other payment methods provides alternatives.