eBay’s payment method: Adyen in, Paypal out
In January 2018 eBay released the following statement:
“eBay has signed an agreement with Adyen, a leading global payments processor, to become its primary payments processing partner. PayPal, a long-time eBay partner, will be a payments option at checkout for eBay buyers. eBay will complete this process within the parameters of the Operating Agreement with PayPal, which remains in place through mid-2020.”
This announcement has raised quite a few questions among eBay sellers regarding the transition and Adyen itself. It also surprised me as some who’s been working in the eCommerce industry for over a decade and thought he knew all the major players in the industry.
Although Adyen has processed €108 billion in 2017, I never heard of them before this announcement.
I decided to write this post to serve as your complete guide to everything Adyen-eBay related, including:
- Why eBay abandoned PayPal for Adyen?
- Adyen fees
- Adyen payment methods
- Is Adyen safe?
What is Adyen?
Adyen’s main business is similar to Paypal’s, offering merchants online services for accepting electronic payments by payment methods including credit cards, bank-based payments such as debit cards, bank transfer, and real-time bank transfers based on online banking.
Adyen was founded 8 years after Paypal (in 2006) and has grown very rapidly to become one of the major online payment processors in the world.
Adyen is no stranger to marketplaces either, serving as a payment processor for Etsy.
Adyen accepts more than 150 currencies and over 200 methods of payments.
Why eBay abandoned PayPal for Adyen?
If you compare Adyen to Paypal by the numbers you will see that Adyen is relatively small compared to Paypal. A quick look at both companies market cap reveals that Paypal is valued almost 6 times higher than Adyen ($98B vs. $17B as of November 2018).
Moreover, as I already mentioned, Adyen is a much younger company and until recently was considered a startup.
eBay claims that the move to Adyen will have three major benefits:
- Lower Costs – according to eBay “most sellers can expect their costs of payments processing to be reduced after they transition to eBay’s intermediated payments model”.
- Streamlined process – Sellers will be able to manage payments within the eBay platform, thus eliminating the current situation where sellers manage their sales via eBay and manage payments via Paypal. Sellers can easily track and manage all of their transactions and customer interactions on eBay.
- Greater Buyer Reach – Adyen lets consumers pay in 150 currencies, hence eBay believes sellers will be able to reach more buyers.
On the buyer side, the experience should also improve as Adyen will let them checkout within eBay, rather than being directed to PayPal before completing a purchase.
When will the transition from Paypal to Adyen occur
eBay will continue to let customers use PayPal as an option for checking out until July 2023, but most of eBay’s payments will be processed by Adyen by 2021.
Adyen charges a processing fee + payment method fee per transaction.
You can find the full Adyen pricing here.
What about monthly fees?
While I was doing my research to write this post I noticed many people asked about monthly fees and found that Adyen does charge a minimum invoice of €100 ($120 U.S.) per month, depending on transaction volume and region.
They don’t call it a monthly fee because you don’t have to pay extra if your sales volume reaches $120 per month.
In my prime days as an eBay seller I was paying Paypal fees of around $8000 every month (!), so paying just $120 sounds like a great opportunity to save A LOT of fees for high volume sellers.
Do you need an Adyen account to buy or sell on eBay?
According to Adyen’s site, you don’t need an Adyen account.
This is one of the big benefits as it streamlines work. To give you an example, I use the Upwork platform (which used Adyen as it’s payment processor) frequently and whenever I have to pay I do it directly on the Upwork platform, I’m not redirected to any external payment processor (like I do with eBay-Paypal).
Is Adyen safe?
No company is 100% bulletproof, but Adyan was founded by world-class experts in the field of payments and is serving some of the largest companies (including Uber, Airbnb, and Etsy) so I wouldn’t be too worried about its safety.
I would argue it’s no less safe than Paypal.
Adyen payment methods
Adyan support over 200 payment methods, I think it’s best if you take a look at the list of payment methods on their site.
One example: for Apple pay, Adyen charges $0.12 processing fee, and the payment method fee is defined by card used.
Can you choose to stick with Paypal?
eBay has an operating agreement with Paypal which expires in 2021 and eBay hopes to make the transition to Adyen by then.
According to eBay’s press release sellers must transition to continue selling on eBay:
“Sellers will be required to complete these steps in order to continue selling on eBay, and it is anticipated that this transition for sellers will occur no later than one year after the expiration of eBay’s Operating Agreement with PayPal, i.e., by July 2021.”
Summing it up
2018 was another rocky year for eBay sellers, we’ve seen the pace of change in eBay since 2017 with the ban of active content, removal of store design, the ban of links, 3-day guaranteed delivery and of course the product based catalog.
As with any change, there are a lot of supporters and opponents. To me, the reality is that we as sellers have to adjust in order to survive, eBay is not the only marketplace changing, we see this change in all the major marketplaces and it’s not getting easier as eCommerce becomes more and more competitive.
I don’t believe in any “get rich fast” schemes and nothing ever came easy for me, the harder I worked the more chance I had to succeed, this is another change we have to embrace and make the most of.
Thanks for reading and I’d love to hear your comments below.