eBay to drop American Express cards as payment option: Citing high fees, eBay is reportedly dropping American Express (Amex). The online marketplace will stop accepting Amex as a payment option starting August 17, Bloomberg News reported Wednesday (June 5), based on an email eBay plans to send to its customers.
eBay Inc. will cease accepting American Express Co. cards as a payment option on its online marketplace due to “unacceptably high fees,” according to an email reviewed by Bloomberg News that the company plans to send to customers.
eBay intends to notify customers this week about the change, which will take effect on August 17.
“After careful consideration, eBay has decided to no longer accept American Express globally effective August 17 due to the unacceptably high fees American Express charges for processing credit card transactions,” the email states.
The two companies have been embroiled in negotiations over the merchant discount rates, also known as interchange fees, charged by Amex at the point of sale. These fees, charged each time a card is used in a transaction, have long been a burden for merchants. One trade group reported that retailers paid more than $172 billion in card-processing fees last year.
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Amex, however, claims that its fees are comparable to what eBay must pay to accept similar cards on other networks, like Visa Inc. and Mastercard Inc., while providing more value.
“American Express Card Members have an average transaction size at eBay that is more than double the transaction size of cards from other networks,” New York-based Amex said in a statement. “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.”
Competitors of eBay, including Amazon.com Inc., have made similar moves during negotiations over transaction fees. Amazon threatened to stop accepting all Visa cards on its global network before eventually striking a deal. Amex has also lost deals, such as its once-exclusive pact with Costco Wholesale Corp., over its terms.
eBay has lost significant market share to other e-commerce giants like Amazon and Walmart Inc. in recent years and recently provided a weaker-than-anticipated earnings outlook for the current quarter. Globally, shoppers are expected to spend $73.4 billion on the marketplace this year, according to average analyst estimates compiled by Bloomberg.
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