In a development that could affect ecommerce users across the world, eBay has announced it will no longer accept American Express (Amex) cards as a payment option due to “unacceptably high” fees.
The decision, detailed in an email seen by Bloomberg that’s set to go out to customers, will come into effect globally from August 17.
Amex’s fees have long been a contentious topic for merchants. Typically set higher than Visa and MasterCard rates, companies end up paying a higher percentage of each transaction for customers paying with Amex.
eBay will no longer accept Amex payments
The email, which eBay reportedly plans to send to customers this week, reads: “After careful consideration, eBay has decided to no longer accept American Express globally effective August 17 due to unacceptably high fees charged by American Express for processing credit card transactions.”
Negotiations between eBay and American Express had not gone to plan, leading the online retailer to pull out of the Amex market.
eBay’s move follows similar actions taken by its competitors – Amazon notably threatened to stop accepting Visa cards on its global network citing high transaction fees, before eventually reaching a deal.
Moreover, the move could be one designed to improve eBay’s profitability amid stiff competition from other online retailers. The company recently reported a weaker-than-expected profit outlook.
Bloomberg also noted that Amex stated its fees for eBay are comparable to other card providers, like Visa and Mastercard, but that it adds more value.
eBay told TechRadar Pro in an email:
“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.”
Looking ahead, customers wanting to spend on their Amex cards can continue to do so through PayPal, which is supported as a payment method on eBay.
eBay added: “Based on internal research, we know that the vast majority of eBay customers are willing to use alternative payment options to continue enjoying buying and selling on our marketplace.”
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