The e-commerce giant eBay has announced that it will discontinue accepting American Express cards as a direct payment method due to what it deemed "unacceptably high" fees.
The move underscores a broader issue of escalating credit card transaction costs, driven by a lack of competition in the industry.
The e-commerce giant eBay has announced that it will discontinue accepting American Express cards as a direct payment method due to "unacceptably high" fees.MARTIN BUREAU/AFP via Getty Images
eBay Ceasing American Express' Acceptance Over High Fees
eBay will stop accepting American Express cards due to "unacceptably high" fees starting August 17. eBay announced it will no longer accept American Express payments on Wednesday, citing the "unacceptably high fees" associated with Amex transactions.
eBay noted that credit card transaction fees are rising unchecked due to a lack of meaningful competition. The company said more robust regulations are needed to drive greater competition among credit card networks and help lower transaction processing costs.
eBay will continue to accept Visa, Mastercard, Discover, and other payment methods like PayPal, Apple Pay, Google Pay, and Venmo. Despite technological advancements and investments in fraud capabilities and customer protections by merchants like eBay, credit card transaction fees continue to rise because of a lack of meaningful competition.
eBay is notifying customers about the upcoming change to ensure a smooth transition on August 17. This announcement highlights the variety of popular, relevant, and secure payment options available on the marketplace.
Recent research shows that most eBay customers are willing to use alternative payment methods to continue enjoying their buying and selling experiences.
With two billion listings and 132 million active buyers in 190 markets worldwide, eBay supports small business growth and creates economic opportunities for communities. Customers are strongly connected to eBay due to its unique inventory, attractive prices, and significant role in promoting e-commerce.
As consumers and small businesses face concerns about inflation and rising costs, stronger regulations are needed to increase competition among credit card networks and help reduce transaction processing costs for merchants and their customers.
Reacting to eBay's decision, American Express said on its website that its fees are similar to other cards accepted on eBay. The company argued that dropping American Express as a payment option contradicts eBay's goal of increasing competition at the point of sale. Additionally, Amex noted that eBay accounts for less than 0.2 percent of its total network volume.
Similar disputes have occurred before between retailers and credit card companies. In 2022, Amazon nearly stopped accepting Visa in the UK. However, after resolving their dispute, Amazon eventually agreed to accept Visa cards across its global network.
Amazon also said it will no longer charge Visa card customers an extra fee on its sites in Singapore and Australia as part of their agreement. The dispute centered on the payment fees Visa charges Amazon for each credit card transaction.
In the UK, Visa's interchange fees on credit cards rose from 0.3 percent to 1.5 percent after the UK left the European Union and was no longer bound by EU fee limits.
Amazon considered moving its lucrative co-branded credit card from Visa to Mastercard to secure better terms. The agreement also includes a joint commitment to collaborate on new product and technology initiatives.
