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Summarising your eBay payments comments

By Chris Dawson July 7, 2020 - 8:55 am

Since publishing the eBay Payments Q&A with eBay Vice President Murray Lambell yesterday, we’ve noted your comments, emails and phone calls and today summarise your eBay payments comments below.

It’s worth noting that sellers representing a significant proportion of eBay UK’s GMV have quietly signed up to eBay payments and not a single happy seller has contacted us – that’s quite normal as people are quick to complain and those who are happy have no real reason to submit eBay payments comments. Nonetheless, there are some important points to note:

Registering your bank account

We’ve heard from a number of sellers struggling to link their bank account to eBay payments. Some of the issues appear to be where your bank account name doesn’t match the details on your eBay account (certainly not unusual for sellers with multiple eBay accounts, sole traders, and partnerships). Others have pointed to issues where the process of linking to eBay didn’t seem to accept their bank user name and password as valid.

Micro Payments

Perhaps one of the best kept secrets of PayPal is Micro Payments which offer a 5p per transaction fixed charge coupled with a higher percentage of the transaction (5p plus 5% compared with 30p plus 2.9% or lower).

“I’ll be 20p-40p-ish worse off for every sale, as I’m on Micropayments.”
– Joe

“Currently with PayPal Micropayments, this is no problem: 12p to eBay (10% + VAT) and 10p to PayPal (5p fixed fee + 5%). Total 22p or 22%. With Managed Payments, this almost doubles and becomes 43%!!! (30p fixed fee + 13%).”
– Rob

The big danger here is that products with a sale price of under a fiver (and definitely products selling for under £2) may become unviable to sell on eBay. Yes, there are solutions such as selling product bundles, using cross promotion in an attempt to increase basket size etc, but the reality is that to cover the difference a price rise is likely to be required.

A solution might be to use eBay Multi-buy promotions and add 20p or so to the first item with steep discounts for second, and third items purchased on the same order, but apart from the management of this pricing strategy, higher prices may impact your visibility in search and it won’t solve the problem for the buyer that wants a single USB cable and can purchase it at a lower price on another venue.

Accounts, VAT and reconciliation

We kind of side stepped this issue in the Q&A with Murray as it’s complex and intend to address it in another post coming imminently. There are lots of questions such as VAT accounting, visibility of the gross sales amount, handling VAT for overseas sales and a whole load of other challenges you’ve told us you want answers on.

Lower PayPal Volumes

One issue which many wont’ have considered is that losing their eBay payment volume from PayPal will result in paying higher PayPal rates for the non-eBay parts of your business. The more volume you put through PayPal the greater the discount level you’ll receive. This won’t impact sellers on 2.9% PayPal rates, but if you are a high GMV seller than this could impact you.

Vat on fees

A couple of sellers have pointed out that they don’t pay VAT on PayPal fees but they do on eBay fees. If you are VAT registered then you’ll be able to reclaim the VAT but it will very slightly impact total costs for non-VAT registered sellers.

PayPal Working Capital

PayPal have done a superb job with the PayPal Working Capital product and sellers love it for it’s simplicity, ease of access and speed of getting funds available in their account. PayPal emailed many sellers yesterday on Monday evening and we address this in a post here.

  • Steve
    1 month ago

    Surely a referral to the Competition and Markets Authority as you have no choice. Ebay are closing their platform to competition and are able to bully us into paying more.

    When comparing fees for payments Ebay will more than double other payment providers.

    Prices will go up to compensate, customers will pay more, we will make less and ultimately people will shop elsewhere.

    Ebay payments #licensetoprintmoney

  • Ratso
    1 month ago

    “not a single happy seller has contacted us”

    Go on then, I`ll be the first. Despite all the stuff being spouted around the registartion process it took around 10 mins to sort the registration with no issues whatsover so far.

    Lets face it change has been on the cards for years- anyone around when Ebay sold off Paypal should not see this as some kind of shock and in the long run it should simplify things all `round…..

    Thanks Ebay!

  • 1 month ago

    Looking forward to your Accounting VAT & Reconciliation article as when I spoke to ebay support this morning on that subject they had not thought of that. A few hours later the contacted me except to say there will be something that you can use to report the transactions which you can then manually import. This will be a disaster as it will increase the work load for small businesses.

    • Keely
      1 month ago

      Agree. I’ve just been looking at last month’s ebay statement. We have a deferred payment for the covid thing and the statement is so hard to work out. Downloading transactions and nothing adds up to what the statement says so Im really worried about accounting. They also need to confirm we can download everything in detail for full tax years years too.

    • Jonah
      1 month ago

      @Rich and @keely- ebay can’t even get mangled payments registration to work correctly never mind about the VAT side. Another half baked money grab idea that will increase the workload for small businesses. Ebay invoices are complicated enough as it is, I dread to think what the new ones will look like. Manual reconciliation will be inevitable, huge workload just to try to stand still.

    • NorthCrystal
      1 month ago

      @Keely
      Our eBay statements differ to what they actually charge us, on monthly basis. Sometimes they charge more than invoiced, sometimes the other way round. Fortunately (?) the amounts are tiny ones like few £. However our accountant loves eBay to their bones.

  • NorthCrystal
    1 month ago

    Multiple buys for low value items to mitigate the impact on non existent micro fees? Haha good one! When I need a bulb to my car, yes indeed, I will buy 20 bulbs because that’s such a brilliant deal!
    eBay will host big players only, as small businesses will have too much work(arounds) to dance with.

    • 1 month ago

      At some point, they’ll just have to put the price up for items like that, whether it’s because of the end of paypal micropayment fees on ebay, the Royal Mail annual rise, taxes, or other costs, of which their are many.

      People will still buy them, because they’ll still be low enough value that it won’t be worth the buyer’s time trawling the internet to find another site. They’ll just do the usual, go to ebay or Amazon, think “that sounds about the right price” and hit the buy button.

      Multiple buy discount should work well on other low value items, like stamps, or postcards.

  • Gemma
    1 month ago

    Paypal have told us that if we move to managed payments, we will lose our £25,000 Paypal Working capital limit, and our fee rates will also go up with the reduced sales volume. Our business is seasonal and we don’t have access to any other affordable finance; the Paypal solution is perfect for us – the payment amounts aren’t fixed and we only pay a percentage of sales, so we aren’t disproportionately affected during our quiet periods. The majority of our sales come through eBay, so I really can’t see how our business will survive a move to managed payments.

  • 1 month ago

    None of the issues we have raised with Ebay about registering for managed payments have been addressed.

    We still cannot register as a partnership.

    We still cannot get our bank account registered, despite having used it for Ebay / Paypal since 2003.

    Understand that Ebay.com is now offering sellers $150 to register by 10 July, which suggests panic is setting in on Ebay about getting this to work.

    They only have themselves to blame.

    Who could seriously believe such a seriously disfunctional unit as Ebay could launch this smoothly.

    Also agree about the fees, we lose on every count compared to paypal.

    Our partnership is no longer listing fresh items on Ebay and will not do anything more to comply with this nonsense.

    It’s up to Ebay to sort this sh*t out.

    Looking at a complete switch into items which can be retailed on Amazon or web channels instead.

  • NorthCrystal
    1 month ago

    Kinda looking forward to all those complaining about the mangled payments to leave sheBay for good so that I’ll have more sales… until a VeRo member comes in with a request again and blocks our sales for few days. Not to mention, the said VeRo member failed to respond to our emails (no phone available…) and E being E is avoiding any responsibility, as always.

  • Jonah
    1 month ago

    More trouble with ebay mangled payments, we can not register as a partnership.
    Lots of repetitive hoops to jump through, time wasting noise that just keeps on being stuck in the same loop “we can’t confirm your business bank account”.
    Really ebay ? That same business bank account that has been paying you hundreds of thousands of pounds in fees since 2001 ?
    You couldn’t make it up.

  • 1 month ago

    Yeah, none of this inspires any confidence in me whatsoever and we’re now pushing our Magento store big time.
    We’ve had repetetive emails (IN EBAY MESSAGES) asking us to complete our reg’, then it tells us we’ve already done so and ‘we’re on the list’.
    I’ve been on eBay UK for nearly 20 years, can anyone tell me a single thing they’ve deployed that’s worked as intended from day one ? I can’t, I literally cannot.

    • NorthCrystal
      1 month ago

      Single thing that eBay deployed and it worked without trouble from day one?

      Automated returns!

      😀

  • 4 weeks ago

    Absolutely disgusted with eBay.

    They make around £8K a month in fees from us. We sell low priced items in large volumes.

    Charging a 30p flat fee is morally wrong. If I sold TVs for hundreds of £s I would still only pay 30p. But our average sale price is around £2.

    They will literally make an extra £2K a month from us, when we only pay around £1K to PayPal.

    Daylight robbery! And to not offer an opt out is frankly outrageous.

    Despite pushing this to director level at eBay, they have told me it’s tough and this is the way they want to go.

    So basically we now have to raise our prices to cover this £1K a month in fees, which will be paid by our customers.

    The fact is that most of our customers are savvy and will find our products on Amazon, Etsy or our own website for cheaper and eBay will miss out.

    Short-termism at it’s absolute worst!

  • wayne
    2 weeks ago

    Is it possible to set up a go fund me page for poor ebay? LOL
    These legal non understandable messages we get are too far over my head as
    all I understand is,I work hard to find a deal on any object in an effort to make SOMETHING and the set up now with the additional NO TRAFFIC unless I pay for it has made up my mind for this idiotic echoke issue.I’m out of here.
    wayne

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