In a recent move, online marketplace eBay has announced that it will no longer accept American Express as a payment option, citing high fees associated with the credit card company. The decision, set to take effect on August 17, comes as eBay looks to offer customers more competitive payment options through other platforms like Apple Pay, PayPal, Klarna, and Affirm. This move marks a blow to American Express, known for having customers who are attractive to merchants and spend generously on their cards each month. This decision by eBay is in line with a growing trend of online merchants pushing back against payment processors due to high transaction fees.
The fees charged by payment processors like American Express have been a point of contention for online merchants in recent years. eBay’s decision to drop American Express follows a similar dispute between Amazon and Visa in the U.K., where Amazon threatened to cease accepting Visa due to high fees. AmEx typically charges a percentage of each transaction processed through their network, with fees varying by industry and card type. The National Retail Federation indicates that credit card acceptance fees can range from 2% to 4%, with premium rewards cards like AmEx often on the higher end of the spectrum.
American Express has responded to eBay’s decision by highlighting the spending habits of its cardmembers on the platform, stating that AmEx customers typically spend double compared to other network users on eBay. Despite this, eBay’s move to drop AmEx has been criticized by the credit card company as inconsistent with eBay’s purported goal of increasing competition at the point of sale. AmEx, under CEO Steve Squeri, has been striving to expand its acceptance among merchants to combat the perception that it is less widely accepted than Visa and Mastercard. While AmEx claims to have achieved a 99% acceptance rate in the U.S. comparable to other major card networks, setbacks like the loss of Costco as a partner in 2015 have impacted its position in the market.
The decision by eBay to no longer accept American Express is expected to have a limited impact on the credit card company, with analysts estimating that eBay represents only a small fraction of AmEx’s global network volume. Despite this, the move underscores a broader trend of online merchants pushing back against high transaction fees charged by payment processors. AmEx’s insistence that its fees are comparable to other networks may indicate a reluctance to adjust pricing for individual merchants like eBay. Ultimately, eBay’s decision to drop American Express reflects a strategy to offer customers a wider range of payment options and increase competitiveness in the online marketplace, even at the expense of losing a well-known credit card partner.
