eBay Cancels AmEx – Find Out The REAL Reason Behind This Controversial Decision!"

 EBay Inc. Decision to stop accepting American Express cards effective August 17 made headlines, but some payments industry experts questioned whether the decision was actually a ploy to negotiate lower exchange rates from the travel and entertainment card giant.

Image : Google.com/eBay

considering eBay says it won't stop accepting AmEx for about 10 weeks.

“It's no secret that AmEx is very expensive to accept compared to Visa and Mastercard, but if merchants want to stop accepting the card, why wait so long to do so?” said Cliff Gray.

principal at Gray Consulting Ventures LLC. “It will be interesting to see how it plays out.”Further compounding the question of AmEx's high acceptance fees is that AmEx's market share pales in comparison to Visa and Mastercard. 

This makes it difficult for traders to justify AmEx's high entry fees.“AmEx was launched to serve business travelers, not consumers in general. 

“While merchants may have customers who want to pay with AmEx, the question is do they have enough customers who want to pay with AmEx to justify the cost of accepting them?”

EBay said in an emailed statement that the decision to discontinue AmEx was due to its “exorbitant costs.”

“At a time when payment processing costs are decreasing due to technological advances, investments in fraud capabilities, and customer protection by merchants like eBay, credit card transaction costs continue to rise due to a lack of meaningful competition,” eBay said. 

EBay said its customers have been notified that AmEx will no longer be accepted starting August 17 so that users who normally make purchases using AmEx will have enough time to switch to another payment method.

“Based on internal research, we know that the majority of eBay customers are willing to use alternative payment options to continue buying and selling on our marketplace,” eBay said.

eBay's move to eliminate AmEx was also seen by merchant advocates as an indication that sellers are increasingly frustrated with what they view as high card acceptance fees, which are typically measured by the exchange rate, or the percentage of sales paid by the merchant. to the processor.

“Whether it's small merchants charging extra fees to cover the cost of accepting cards or actions to stop accepting cards, there's no doubt that merchants of all sizes are fed up with high interchange fees,” said Doug Kantor, MPC executive committee member and general counsel for National Association of Convenience Stores.

In a statement posted on its website, AmEx said that while it was disappointed with eBay's decision, internal research showed the cost of accepting AmEx cards in America was comparable to what eBay paid for similar cards on other networks. 

“We consider eBay's decision to discontinue American Express as a payment option for consumers inconsistent with their desire to increase competition at the point of sale,” AmEx said in a statement.

EBay represents less than 0.2% of AmEx's volume, the card network saidOne of the largest e-commerce merchants, eBay posted gross merchandise volume of $18.6 billion, during the first quarter of 2024, up 1% from the same period a year earlier. 

Revenue for the same period totaled $2.6 billion, up 2% from last year. eBay has 132 million active buyers worldwide.

In comparison, e-commerce giant Amazon.com.

posted total sales of $143.3 billion during the first quarter, up 13% from the same period last year. Of that, North American sales totaled $86.3 billion in the quarter, up 12% from a year ago.

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