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Thu Mar 5 2020 22:13:42

PayPal Proposes Direct Deposit for eBay and Etsy Sellers

By: Ina Steiner

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eBay is becoming a payments intermediary just as Etsy had, meaning instead of paying sellers, buyers pay eBay, which then disburses funds to sellers' bank accounts. However, many sellers prefer the old way of having buyers pay them directly so they have instant access to funds in their PayPal accounts.

PayPal is proposing a workaround called Direct Deposit, though it appears it may only be available to sellers who participate in its PayPal Working Capital loans program.

Sellers still wouldn't get instant access to funds, but they could have eBay and Etsy disburse funds directly into their PayPal accounts if they preferred, eliminating the extra step of transferring funds from their bank accounts to their PayPal accounts.  

PayPal sent a survey to sellers describing the hypothetical Direct Deposit feature and stating, "Since your marketplace sales aren't processed through your account with PayPal, you can't automatically repay your PayPal Working Capital business loan. That could make it harder to be approved for a loan down the line. But don't worry, we've got you covered with PayPal direct deposit."

Among the benefits of the hypothetical service the survey described is the following:

"Fast access to your sales without fees.
"Once eBay or Etsy processes your sales, your funds will be available in your account with PayPal in 1 to 2 business days. There are no transfer fees or any other fees."

The key benefit PayPal is proposing is the ability to stay compliant with PayPal Working Capital loans. A seller who received the survey explained that PayPal Direct Deposit is basically a unique routing number that sellers could provide eBay and Etsy. "PayPal would draw off a set percentage to pay Working Capital loans," the seller said.

The seller shared further thoughts about the proposed PayPal Direct Deposit offering as described in the survey:

"For people who need their funds coming from eBay or Etsy to end up back in their PayPal account, this could be a fast lane to that result. Without this, your funds end up in a bank account and then you have to move them to where you need them. Could be a few business days on the transfer. And likely some people would have to open a separate bank account to have a buffer between their "real" account and the marketplaces. With this Direct Deposit, the funds flow through your PP account first. 

"Either way, you have to wait for the marketplace to post your funds, but instead of being in a bank account, they would be in a PayPal account and maybe provide more options and flexibility.

"Sounded like a possible solution to the problems people have been discussing lately regarding Managed Payments. We'll see if that proves to be the case."



Comments (20) | Permalink

Readers Comments

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: shut1968 This user has validated their user name.

Fri Mar 6 06:39:28 2020

That's been the major issue for us.. we'll have to see how this shakes out.

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: DingDong This user has validated their user name.

Fri Mar 6 08:10:09 2020

I was hoping that they were going to do this but for everyone.
I don't need working capital loan.
I just want a way not to give every site my banking information and such.

 

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: Geetar This user has validated their user name.

Fri Mar 6 09:13:31 2020

Yes, "buffer". Thats a great word to describe ebay's sticky fingers being limited.

This is good, I may look into it. I currently have a paypal WC loan right now. Will probably be paid by june, I dont plan on getting another, but maybe a small one.

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: purpleiris This user has validated their user name.
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Fri Mar 6 14:01:23 2020

That doesn't work for those of us who don't have working capital loans. The only thing that does work is to refuse to sell on a site that thinks it owns my money.

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

This user has validated their user name. by: iheartjacksparrow

Fri Mar 6 15:51:43 2020

"PayPal is proposing...." Has PayPal actually discussed this plan with eBay or Etsy? Sending out a survey seems like a waste of time unless PayPal already has the sites on board with their plan. Unless they are hoping to get overwhelming positive survey results that they can then use to coerce eBay and Etsy into agreeing to this plan.  

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: Shanna This user has validated their user name.

Fri Mar 6 16:15:14 2020

Paypal does have leverage over eBay. Ebay buyers are not going to give up paying with Paypal, and Paypal can ask eBay to play nice with them, or eBay can pay the 2.9% + $0.30 just like everyone else.

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: grumpwell This user has validated their user name.

Fri Mar 6 19:13:40 2020

I would be concerned with getting an IRS notice for $ processed by managed payments and then an additional IRS notice for the money coming into the PayPal account. With the reporting rules it might make it look like I have twice as many sales as I actually do...

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: shut1968 This user has validated their user name.

Fri Mar 6 20:14:21 2020

All they have to do is alter their system a little to be even more like a bank, have a routing and account number for ACH deposits and it's done, you register that with Ebay instead of a bank account and your good to go.  As long as there are no PayPal fee's I'm good with it.

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: shut1968 This user has validated their user name.

Fri Mar 6 20:15:40 2020

In reality if they did that (what I posted above) they wouldn't need any kinds of permissions from Ebay or Etsy.. while they may be requiring a bank account what they can't do is tell you what bank accounts you can use.

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: Silver Ice King This user has validated their user name.

Sat Mar 7 16:46:47 2020

@shut1968

Don't put money on it that they will not try in the future.  If there is any way that Ebay can monetize which banks they send Sellers money to they will change the policies whether it is legal or not.

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: Whatever This user has validated their user name.

Sat Mar 7 18:46:46 2020

They all just keep mucking it up don't they? Sure there will be no charge - for how long?  I already set up my new clawback account for ebay with my bank. I have another set up for my website thru Paypal. My credit union will give me for free as many as I need.  Getting ready to set up another just for Mercari. And all 3 venues are locked out of my main personal checking account. And I don't need a capitol loan from paypal - shite - just need to get rid of the inventory I already have thank you. Then I'm going fishing.

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: Opalie This user has validated their user name.

Sun Mar 8 08:12:14 2020

I would assume that as the money from ebay would be through direct deposit PayPal would not include that in a 1099 as sales income as they do now.

Even if they did for some reason, it would be relatively easy to reconcile those deposits to the payouts from ebay for tax calculations.

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: Opalie This user has validated their user name.

Sun Mar 8 08:13:58 2020

This isn't just a solution for those with PP WC loans, anyone would be able to use it, but it would mean (hopefully) you could still get WC loans rather than the ebay offered Square Capital loans they're touting.

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: acertainblue This user has validated their user name.

Mon Mar 9 01:01:53 2020

I got excited when I saw this - have grown used to being able to better control my earnings, with payments going directly to Paypal. Have already lost that with Etsy & know that change it coming with Ebay - at which point, Paypal will no longer serve any purpose for me. I hope they offer it for all PP customers & not just Capitol Loans customers. I even use a PP credit card - again, it will no longer serve a purpose if I don't get any direct deposits to my PP account.

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: Tiffee Jasso This user has validated their user name.

Mon Mar 9 02:00:38 2020

I just got a Greendot card visa card which can be considered a bank account and has a routing number. No fees for deposits. Though it does cost $1.95 for the card at Walmart & Walgreens, and you have to put $20.00 on cared when you buy it, then get ap and register card, and then wait for the permanent card Visa card to come with your name on it which means at least two weeks to get the account up and running. You  do have to give them your name, SSA number, and address. You do not need to give them any other banking information or credit cards.  We will see how it goes. But they consider it a bank account with a card, and do have a routing number for deposits just like a regular bank. If it all works out, it is a great way to work around Ebay's grab for your banking, SSA number and bank account for their foreign money processors. Greendot is in US.  

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: Chicago48 This user has validated their user name.

Mon Mar 9 06:59:28 2020

buyers pay eBay, which then disburses funds to sellers' bank accounts.
^^
If Uber and Lyft can automatically disburse funds to the driver's account within 48 hours....why can't these ecommerce sites do the same?  At least AMZ has AMZ bank where your money is deposited so you can see it in your account and disburse it when you want to or wait for AMZ to disburse.
I just want a rationale for holding monies....is it so that the ecommerce site can earn interest while it sits?

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: Chicago48 This user has validated their user name.

Mon Mar 9 07:01:39 2020

@Tiffee:  I just got a Greendot card visa card which can be considered a bank account and has a routing number. No fees for deposits.
^^
This sounds great.  But I don't want anymore cards and payment system.  Let's see, right now I have 1 credit card, 2 debit cards, 1 business card from PP, a Square account and PP here account.  Not to mention the brokerage accounts that have debit cards.  That's too much for me.  I can't keep track of all these cards.

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: Tiffee Jasso This user has validated their user name.

Mon Mar 9 11:02:31 2020

@Chicago48
My point is that I do not need to pay for a separate bank account as I do not intend to allow foreign payment processors and their partners into my bank account. I have been trying to figure a way around that as I also do not want to pay $25 per month for a new checking account. To me, if this greendot works, then I have a card like I do with Payal, and the only money going into the account comes from Ebay sales. As for cards, I probably have ten or twelve. Only one is a credit card and that is my American Express that I pay off every month. I do not take on debt other than my mortgage. Interest is you working for someone else and not getting a thing out of it but debt.  

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: purpleiris This user has validated their user name.

Mon Mar 9 20:31:22 2020

I wish they'd make it possible for those of us with PP debit cards to use those cards for direct deposit.

Perminate Link for PayPal Proposes Direct Deposit for eBay and Etsy Sellers   PayPal Proposes Direct Deposit for eBay and Etsy Sellers

by: Jairib This user has validated their user name.

Thu Mar 12 07:47:07 2020

I LOVE it!!



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