Ebay Managed Payments and How It Affects Dropshipping

What to know?

  • Most active sellers received a message to sign up by July 15th
  • Once registered change will happen late July
  • Will be messaged by Ebay before change takes place
  • One stop shop for fees just like Amazon
  • Make you sign up and connect a bank account
  • Lowered selling fees + more streamlined

Navigate to:

In today’s ecommerce landscape, online buyers expect to be able to pay for their purchase on the website without any redirection to another site or the need to use another service. In the new managed payments experience, eBay will intermediate the payments so that the customers will be able to complete their transactions all within eBay. That means that the sellers will no longer be paid directly from buyers via PayPal, and instead will be paid daily and directly to their bank accounts.

Generally speaking, the main objective of eBay managed payments is to drive significant benefits to their hundreds of millions of users all over the world. According to eBay, payment innovations and improvements will bring significant benefits for all eBay users. Let’s see the specific customer benefits:

For sellers:

  • Reduced payments processing costs for most sellers
  • Simplified pricing structure
  • Daily payouts directly to your bank account
  • More predictable access to your funds
  • All your fees on a single eBay invoice
  • Consolidated selling and payment information in your eBay account
  • Greater buyer reach and improved conversion
  • Centralized customer service

For buyers:

  • Greater choice in payment options at checkout and new ways to pay (mobile payments)
  • Integrated checkout experience

We can conclude that the sellers are central to creating this new payout experience. eBay claims to do everything possible to partner closely to the customers and take extra efforts in order to listen to sellers’ opinion, feedback, ideas and prevent the possible hardships that might arise.

Exclusive eBay Comments on Managed Payments Experience.

As it was scheduled, the Apple Pay rollout began this fall for those that had opted in early to eBay managed payments. In such a way, the buyers are allowed to purchase using Apple Pay in iOS and Safari in order to check out both on the mobile web and in eBay’s app.

Thousands of sellers in the US had already experienced accepting the payments through eBay, before eBay managed payments would be rolled out to other countries, and more than 150 transactions were carried out through the managed payments experience.

According to eBay, since introduction of managed payments they have already intermediated more than $20 million GMV. eBay has shared positive feedback of some of the users and even for the convenience of the sellers created a Payment processing fee comparison calculator in order that the customers could see the difference between the current and the future processing costs. Just follow the link to count your fees!

Nevertheless, people still have lots of concerns, worries and questions left without answers.

Answers to Frequently Asked Questions

What is eBay Managed Payments? Essentially, eBay, like many other major marketplaces, will handle its own payments. Currently, PayPal handles eBay payments.

eBay is already testing its Managed Payment system. Some sellers already have opted into testing eBay Managed Payments, and more will be transitioned into the system this year. By 2021, eBay expects most of its sellers to be on Managed Payments.

We’ll give you a concise summary of what changes to expect before the transition goes into full effect. Note that the service is evolving, so you’ll want to visit the website for up-to-date information.

How do I join eBay Managed Payments?

Currently, only sellers who were invited can participate in eBay Managed Payments. If you have multiple seller accounts, you can request that eBay add the other seller accounts to the new payment system. You’ll want to be aware of some of the current limitations before you decide to join.

What are the advantages for sellers?

When making the transition to eBay Managed Payments, sellers will need to provide a bank account so that eBay can deposit sales proceeds. Sellers on other platforms like Etsy and Amazon will find this process familiar.

Currently, customers will send you money via PayPal and eBay will bill you monthly. You’ll then request a disbursement from PayPal, less any funds held in reserve.

Here are the major changes sellers can expect:

  • Streamlined management of selling and payments
  • More transparent invoicing so that you see all your fees in one place, including payment process fees
  • Daily payouts
  • New payment methods like Apple Pay
  • Streamlined seller protection with claims and chargebacks handled through eBay
  • Lower processing fees, currently a flat 2.7% instead of 2.9% + 30¢ with PayPal

What are the disadvantages for sellers?

While eBay Managed Payments have many advantages, there are still some disadvantages to using the new payment system. However, these disadvantages are likely to be resolved as the platform matures.

  • Customers can’t pay with PayPal until it’s integrated, expected sometime mid-2019
  • eBay Managed Payments does not support Global Shipping Program (GSP)
  • USPS shipping labels are still paid through PayPal
  • No listings on eBay International Services
  • Does not support eBay for Charity

What changes can buyers expect?

For the most part, buyers will experience a little confusion since customers expect to pay with PayPal.

eBay Managed Payments will simplify the checkout process so that there’s no PayPal login required. They’ll simply enter their credit card information as they would with any other online purchase. They’ll also have the option to save payment methods.

What are some other changes buyers and sellers can expect?

This transition over to eBay Managed Payments will change the claims process for buyers and sellers. For sellers, managing claims will be easier since they’ll only have to deal with eBay instead of both eBay and PayPal.

Previously, sellers faced the very real situation wherein they’d win a fraudulent claim on eBay but lose that same claim on PayPal. PayPal would then refund the buyer. Or sellers would be bounced back and forth between eBay and PayPal to resolve issues.

With eBay handling payments, sellers can expect a more streamlined process and more consistency with customer claims. Many of the disadvantages are likely to be resolved as eBay continues to work on its own payment system. Be sure to check out eBay for the latest updates.

You can check eBay’s official announcement for more information.