eBay Halts American Express Payments Due to High Transaction Fees

Ebay has announced it will discontinue support for American Express card payments due to exorbitant transaction fees. The decision, driven partly by the availability of alternative payment methods, reflects eBay’s adaptation in the ever-evolving payments landscape.

By integrating various payment options such as Apple Pay and PayPal, along with new services from Klarna and Affirm, eBay believes its customer base is well-versed in navigating these alternatives. This move indicates a strategic shift away from American Express, which has long been considered a reliable and robust spending segment for merchants.

Long-Term Implications and Industry Background

The decision to eliminate Amex payments could have significant repercussions for both eBay and its customers. According to Brian Riley of Javelin Strategy & Research, “American Express is well-established with consumers who carry strong FICO Scores and a substantial disposable income.” This customer base might be lost due to the reduced payment options.

The ongoing dispute between merchants and credit card companies regarding interchange fees highlights the complexity of this issue. Despite high-profile settlements like Visa’s $30 billion agreement, reductions have been minimal, making these agreements more symbolic than practical.

Response from American Express

In reaction to eBay’s decision, American Express stated it was disappointed by the move, describing it as inconsistent with eBay’s stated commitment to increasing competition at the point of sale. Notably, Amex emphasized that eBay constitutes less than 0.2% of its total network volume and that card members can continue using their cards for transactions across millions of merchants.