EBay is dropping American Express cards as a payment method due to “unacceptably high fees,” according to a statement from the online marketplace.
EBay notified customers about the changes on Wednesday, which are set to take effect on Aug. 17.
“After careful consideration, eBay has decided that as of August 17th, we will no longer accept American Express globally due to the unacceptably high fees that American Express charges to process credit card transactions,” the company said in a statement. statement.
The two companies are locked in negotiations over the merchant discount rate that AmEx charges at the point of sale, also known as the interchange fee. The fee, which is assessed each time a card is used for a transaction, has long been a headache for merchants. One industry group has said that retailers are paying $172 billion Card processing fees last year.
But American Express says after an investigation, it found its fees were comparable to what eBay would have to pay to accept similar cards on other networks, such as Visa and MasterCard, and that it offered better value.
“The average transaction value of American Express cardmembers on eBay is more than double that of cards from other networks,” New York-based Amex said in a statement. “We believe eBay’s decision to remove American Express as a consumer payment option is inconsistent with the company’s stated desire to increase competition at the point of sale.”
eBay’s competitors, including Amazon.com Inc., have made similar moves in negotiations over transaction fees. Threatened Eventually, they will stop accepting all Visa cards across their global network. Sign a contractAmex also Transaction failureThis includes its former exclusive contract with Costco Wholesale Co.
“Ultimately, AXP prices according to value, and we agree with the company that if it sacrifices price, it will be on a slippery downward slope,” Keefe, Bruyette & Woods analysts Sanjay Saklani, Steven Kwok and Vasundhara Govil said in a note, referring to the company by its ticker symbol. “Recall that this was a big reason AXP severed ties with Costco in the past.”
American Express said eBay accounted for less than 0.2% of total transaction volume on its network.
EBay has lost significant market share to other e-commerce giants such as Amazon and Walmart in recent years, and posted weaker-than-expected sales last month. Revenue outlook That’s expected to reach $73.4 billion in the current quarter. Global shoppers are expected to spend $73.4 billion this year, according to the average analyst estimate compiled by Bloomberg.
