PYMNTS MonitorEdge May 2024

EBay Cutting Amex Ties Over Card Fees

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Arguing its fees are too steep, eBay is dropping American Express (Amex).

The online marketplace will stop taking Amex as a payment option beginning Aug. 17, the company said in a statement provided to PYMNTS Wednesday (June 5).

“At a time when payment processing costs should be declining because of technological advancements, investments in fraud capabilities and customer protections by merchants like eBay, credit card transaction fees continue to rise unabated because of a lack of meaningful competition,” eBay said.

The company adds that its customers have been notified about the change, and says its internal research shows that a wide majority of its users “are willing to use alternative payment options to continue enjoying buying and selling on our marketplace.”

A report Wednesday by Bloomberg News notes that the two companies have been negotiating merchant discount rates — otherwise known as interchange fees — that Amex charges at the point of sale. The fees are charged each time a card is used and can add up, with one trade group saying card processing fees cost retailers more than $172 billion in 2023.

Reached for comment by PYMNTS, a spokesperson for American Express provided this statement:

“We are disappointed that eBay made the decision to stop accepting American Express Cards as of August 17th, 2024. By doing so, they will limit customers’ payment choices and take away the service, security, and rewards that customers value when paying with American Express. Our research tells us that in the U.S. the cost of acceptance for American Express is comparable to what eBay pays for similar cards on other networks. We find eBay’s decision to drop American Express as a payment choice for consumers to be inconsistent with their stated desire to increase competition at the point of sale.”

As covered here last month, the Federal Reserve wants to lower interchange fees, a decision that recently prompted a flurry of responses from various trade groups.

Meanwhile, eBay said last month that it anticipated seeing growth in the latter half of the year amid inconsistent spending by consumers.

Steve Priest, the company’s chief financial officer, said during an earnings call that there had been an “uneven demand environment in our major markets to start the year. … We continue to navigate through a tough environment,” for discretionary eCommerce, especially in the U.K. and Germany, two of the company’s largest markets.

Asked later during the call about the health of the consumer, CEO Jamie Iannone said, “We operate in a really dynamic environment given the macro challenges globally with inflationary pressures and interest rates. … Q1 started off a bit softer because of the weather, but then we had a reasonably good tax period. I would say the backdrop remains weaker in Europe than it does in the U.S.”