Posted by As an online seller of a dropshipping business owner, you are always in need of a payment processor, and if you use eBay, you can leverage the in-built eBay payment processing. The eBay platform is an online avenue that allows you to reach a global audience, thereby creating endless prospects for your business to explore. Since its inception over 20 years ago, eBay has seen consistent growth in its popularity and sales volume.
Also, advancement in the internet and on smartphones means it’s easier to connect your selling business with anyone regardless of location. And in terms of marketplaces, eBay remains a leading name and platform that commands a huge market audience for selling goods and services. In this piece, you will be learning all you need to know about the eBay payment processing option for cashing out on each sale you make.
Understanding the eBay processing payment system
Before now, sellers on eBay could receive payment for goods and services via the third-party PayPal payment processor. Both platforms came together in 2002 and the union saw a rise in the popularity and ease of doing business on eBay. Using PayPal with eBay often means buyers have to leave the eBay platform before they can complete a payment transaction.
In 2018, eBay announced the introduction of its payment processor. It further stated that the new method would help make payment processing easier for sellers and buyers. The online marketplace giant began a phase invitation of sellers to join the eBay managed payments. And by 2021, it became mandatory for the majority of accounts present on the platform.
eBay now processes customer payments for sellers by leveraging its internal system. This payment system is known as eBay Managed Payments. The eBay-managed payments mean buyers will no longer have to leave the platform and offer various payment options to them.
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How long does eBay Processing Payment Take?
With the eBay payment processing system, funds can take two to five business days before showing up in your bank account. The eBay Managed Payment will take at least two days to process and confirm a client’s payment. At the same time, your bank will also take an additional one to three days before making your funds available to you in your account. While your payment is holding, you can use funds to reach your checking account to pay for shipping.
How It Works
The eBay-managed payment system is a simplified way of making payments on the platform. It is only available for use on the forum, and sellers can get money directly into their bank accounts. Here is a breakdown of how it works:
- Upon opening an account on eBay, you will have to link a checking account which can either be a business or current bank account.
- Once a customer makes a payment, it will show up as Processing in Seller Hub, and the eBay Managed Payments system processes the payment.
- Deduction of both payment processing fee and commission happens before sending the balance to you.
eBay payment processing fees
The payment processor charged sellers 2.9% of the total order cost during the PayPal era and 30 cents on every transaction. After the launch of eBay managed payments, the fees remained unchanged until around July 2020.
The eBay platform now charges its payment processing fees as part of a seller’s Final Value Fee. Charges, in general, are around 10%, plus payment fees, and here is a breakdown of the costs:
- If you are a seller with no store or a new seller, eBay charges you 12.35% on orders and 30 cents per transaction.
- eBay charges you 11.5% on orders in most categories and 30 cents per transaction if you have a basic, premium, or enterprise store.
According to eBay, sellers on its platform will save money with its in-house payment processor. Also, in instances of order cancellation or buyer refund, you will get your Final Value Fee back, excluding the 30 cents order fee.
Pros of eBay managed payments
One davantage is its use of Adyen, which is famous for supporting payments on several other platforms such as Etsy, Shopify, and Uber. Using eBay’s managed payment has many benefits, and here are a few:
– Convenience
The new eBay processing payment allows buyers to utilize multiple payment options. This means buyers now have a broader pool to make their selection. You can now pay directly with a credit or debit card, gift cards, Google Pay, Apple Pay, and PayPal Credit as a buyer. With so many options, sellers are sure of making more conversions and increasing profit.
And with the complex payment process being one of the leading causes of cart abandonment, eBay Managed Payment reduces this drastically with its simplicity. As a seller, you also manage all your payments from one location, making accounting and reporting easier. Even eBay attests to its system, taking a convenient reconciliation design.
There is also an additional easy means of tracking your sales by introducing a single order number for each sale. You need not worry about stocks as you can easily track stock levels.
– Mobile-friendly payment option
Buyers and sellers on eBay can also enjoy a mobile-friendly option with managed payments. With an upward growth trend forecast for eCommerce in the nearest future, having a mobile-friendly payment process is essential. The eBay processing payment means you can capture more buyers with relative ease. This also makes it a welcome development for its growing list of mobile app users.
– Faster conflict resolution
Before now, the buyer’s claim had to be done through PayPal, making the process a bit complex. With the eBay processing payment system, every customer dispute is resolved directly by eBay. You can do all your refunds, fees, labels, returns, tax documents, and payment schedules. This reduces the time taken for conflict resolution, and you no longer need to shuffle between two separate platforms.
– Automatic payments
With eBay managed payments, you can now schedule payments directly to your bank account at will. This was unlike what you had when the platform was using PayPal.
Cons of eBay Managed Payments
As with every change, always expect some glitches, and eBay managed payments have their fair share of cons. Since its inception, eBay has been quick to fix any issue. That said, some disadvantages seem to be here to stay:
– Uneasy cash flow
The lifeline of every business is seamless cash flow, and online selling is no exception. To keep up with demands, shipping, and restocking, you need a cash flow that ensures your online store runs smoothly. But with the eBay processing payment system, there can be a snag.
Once the platform lists an order as ‘awaiting shipment’ on the new platform, you need to send it out to the buyer. The snag, however, is that this update becomes available when the payment gets approval and not when the funds get into your account. For many sellers, this slow payout can cause cash flow issues.
To shorten this waiting period, eBay has quickened its processing time, and payments take two days to get to your account after order confirmation. Simultaneously, you can also pay for shipping labels out of your pending charges. However, even with its best efforts, there is still a delay which can cause hesitation, unlike the same-day access to funds sellers had with PayPal.
– No other payment option
There is no other option of accepting payment on the platform with eBay Managed Payments. The eBay processing payment system is compulsory to use eBay and gain access to its over 150 million shoppers. It becomes more disheartening when you can’t use eBay Managed Payments on other platforms.
Why sell on eBay?
Today, eBay is arguably one of the best marketplaces to sell your items if you wish to make money online. You can leverage it to start a side hustle, grow and upscale your business or as an avenue to resell items you no longer need. Regardless of what you choose to do on the platform, you can be sure of starting with little investment.
Formerly known as Auction Web, the platform made its first sale in 1995 when Pierre Omidyar sold a broken printer for $14.83. Since then, eBay has grown into a multi-billion-dollar online marketplace. And here are some stats to pick your interest in the platform:
- As of the first quarter of 2021, there are over 187 million eBay users worldwide and 1.5 billion active sellers.
- Worried about location, the eBay platform has a presence in over 190 different markets globally.
- With an expansion in the mobile audience, eBay offers a mobile app that has seen a download of around 476 million times.
- The platform has a total of 1.7 billion listings.
- As of 2021, the gross merchandise volume (GMV), an index of sales on the marketplace, was over $27.5 billion.
- Also, 71 percent of all purchases done on the platform have been with free shipping.
Conclusion
Selling online is a viable means of making an extra income, and eBay allows you to do this effortlessly. The platform is a rich source of potential customers, and its global reach means you are more likely to sell more. The venue made improvements to its payment process when it dropped PayPal and developed an in-house eBay processing payment system of its own. After setting up eBay managed payments, all your existing listings will automatically update to inform your customers how to make payments.
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