Online marketplace giant eBay has announced that it plans to no longer accept American Express payments, citing “unacceptably high” fees and saying customers have other payment options when shopping online.
This is a big blow to American Express, whose customers are often the most attractive to retailers and also spend the most on their cards each month.
However, this is not the first time that merchants have spoken out against AmEx’s business practices and pulled out. Most notably, Warehouse chain Costco opened a new storefront nearly 10 years ago..
“After careful consideration, eBay has decided to stop accepting American Express worldwide, effective August 17, due to the unacceptably high fees that American Express charges to process credit card transactions,” eBay spokesman Scott Overland said in a statement.
Overland said AmEx was no longer a necessary partner for eBay as eBay customers discovered new ways to pay for items and payments became more competitive than ever.
eBay is increasingly offering customers “buy now, pay later” options when making purchases through Apple Pay, PayPal and other companies such as Klarna and Affirm.
“We know that the vast majority of eBay customers want to take advantage of alternative payment options so they can continue to enjoy buying and selling on our marketplace,” Overland said.
In recent years, online merchants have increasingly found themselves at odds with payment processors over the fees they charge for accepting payments.
Amazon has had a similar battle with Visa. Nearly two years ago, Amazon threatened to drop Visa as a payment method in the UK, citing high fees.
Visa and Amazon finally resolved their differencesthere was no interruption in service.
Like other payment processors, AmEx takes a percentage of each transaction that a merchant processes on its network.
Fees vary by industry, and the fees paid by the largest retailers are typically closely guarded trade secrets.
According to the National Retail Federation, credit card transaction fees average about 2%, but can be as high as 4% for premium rewards credit cards like American Express.
In a statement, American Express said the costs eBay pays to accept AmEx cards are “similar to what eBay pays for similar cards on other networks” and that AmEx cardholders typically spend twice as much on eBay as they do on other networks.
“EBay’s decision to remove American Express as a payment option for consumers is inconsistent with the company’s stated desire to increase competition at the point of sale,” said American Express spokesman Adam Isserlis.
Under current CEO Steve Squeri, American Express has been aggressively campaigning to make its card more widely accepted at all participating merchants and is continuing to fight the negative image that the brand has.
AmEx is less accepted and is only available to cardholders for travel, dining, high-end stores, or in dense urban areas.
American Express says its cards are accepted in 99% of locations in the US that accept Visa and MasterCard, a figure it reached in 2019.
