eBay Managed Payments

eBay is a massive platform, everyone around the World has heard of it and for any independent retail outlet it really should be part of your e-commerce strategy. Gone are the days when it was used for second-hand items, it is so much more than that. They now what to control payments more with the introduction of eBay Managed Payments.

What is eBay Managed Payments?

eBay has now been in our lives for 25 years and during the most part of that it has used PayPal to manage it's payments, yes you could allow cheque, or payment on collection but it's preferred option is PayPal.

12 months ago it was announced that eBay Managed Payments was on it's way. This would give better access to the sellers and more options to the buyer. Starting off in the USA it is now making it's way to the UK. Messages and emails have been sent out to sellers to get them to sign up in preparation of this roll out. As that date draws nearer it seems businesses may still be unaware of this. The date they've been giving is July 15th with warnings that failure to do so might restrict their ability to list new items.

I would imagine failure to implement eBay Managed Payments will also harm their active lists and possibly not rank them as favourably as those that do offer it.

The basics of this for the buyer are very simple, you have more choice in the way you pay. You'll have the option of Apple Pay, Google Pay, Credit/Debit Cards and of course PayPal. From a buying point of view it is all positive and allows more scope to hopefully for eBay bring in new customers.

What does this mean for businesses?

The major plus side for a business is that the money goes straight into your account, it's not transferred to PayPal and then you have to withdraw it. So if you have a busy weekend then the money is there when you return on a Monday. This also applies if the buyer uses PayPal, it still goes straight to your bank account. It also means that you don't need separate accounts for Apple Pay etc to accept them, one account to check payments so it's a much more streamlined system.

Until this system is running and we get a better idea of timings its difficult to say how quick this process will be. On the eBay under their FAQs this is what they have said.

When and how will I receive my payouts?

When eBay manages payments, payouts are sent directly to your bank account, eliminating the need to transfer funds from PayPal. We consistently initiate payouts to seller bank accounts within two business days of an order confirmation, regardless of the buyer’s payment method.  You can schedule weekly or daily payouts to your bank account, as funds are available.

That implies that although the 'transfer' is instant the money might not appear in your bank for 2 days. This is a lot slower than PayPal as the money is there as soon as a customer buys a product and then you can withdrawn the money from PayPal and it's in the bank instantly. This might be a statement just to cover themselves and it may be quicker.

The many part to consider when you sign up is if you make use of the PayPal Working Credit which I know a lot of independent businesses do. You will really need to come up with a plan on how YOU will manage it, no one else, just you. This is from eBay and what they've said about the situation.

Implications for PayPal working capital loans

If you have existing financial obligations related to a PayPal Working Capital loan, your eBay sales will not be available for automatic repayment of these obligations.  There are options to make manual payments and even pay the loan in full anytime with no early repayment fee. You are responsible for understanding the terms of your financial agreements and should contact PayPal with specific questions about your loan.

The other point that I couldn't actually fine the answer to was regarding returns. As the money goes straight to the bank, how do refunds work? I can only assume that the money comes straight from you bank, for sellers that perhaps have cash flow issues this could be a problem. Does eBay withdrawn the money as soon as a buyer requests a return?

For more information on eBay Managed Payments it's worth having a read of their page which is available here.