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EcommerceBytes-NewsFlash, Number 2635 - September 21, 2011 - ISSN 1539-5065    1 of 5

Is Etsy Joining eBay in Testing Payment Processing on Behalf of Sellers?

By Ina Steiner
September 21, 2011

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Sellers on Etsy caught wind of a new test and have speculated the marketplace may intend to eventually start processing payments on behalf of sellers, something eBay is currently testing in Germany.

According to an EcommerceBytes reader, Etsy sellers briefly saw a new link in their stores under "orders" called "seller payment account" that linked to a 404 page. The link was visible for about an hour earlier this week.

The reader explained, "It's led to speculation that Etsy may be altering the payment system so it's more like Amazon... payments will go through Etsy then go to the sellers every two weeks. An Etsy admin chimed in on the thread but only said, "Hey all, sharp eyes to catch this! The link displayed was some internal testing that accidentally slipped out to the seller navigation bar. I've since removed it. Cheers!" That along with the news that Etsy is actively hiring now for that new "call center" of theirs is making a lot of sellers nervous."

Etsy sellers reacted on the boards, with some sellers promising to leave if the marketplace began collecting payments from shoppers on their behalf.

When asked what the Etsy Seller Payment Account was, an Etsy spokesperson told EcommerceBytes it was related to some internal testing.

Some third-party marketplaces have built in payment processing into their models from the start, such as Amazon.com. But moving from a model of allowing sellers to accept payment directly from buyers to one in which they must ship items before receiving payments from the marketplace is not palatable to many sellers.

eBay began a pilot program in Germany in which it handles payment processing for all newly registered sellers. While Amazon forwards payments to 3P sellers less fees, eBay's test has it sending the full payment to sellers and collects fees separately.

Whether or not eBay and Etsy actually implement such a model on their U.S. marketplaces, many eBay and Etsy sellers have written on discussion boards that such a system would be a deal-breaker for them.

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About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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