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Selling on eBay has always been a bit of a sticky proposition. You are trusting another party (a multinational company in this case) with your business. You trust them to be honest, show your listings to people and, above all, pay you.
In the past, you had to have a PayPal account to use eBay as a seller. This meant that many people weren’t able to sell on eBay and that many more were unwilling to do so because they were uncomfortable giving PayPal their information. Well, things have now changed!
Sellers can now sell on eBay without PayPal. To do so requires opting into eBay’s new Managed Payments System. In Managed Payments, eBay processed payments directly and deposits them into the seller’s bank account without using PayPal as an intermediary processor.
But what can you do now? eBay still accepts PayPal as a payment method. So how do you get your money? And, most importantly, are things better and more secure now?
Can You Get Paid On eBay Without Paypal?
In the past, you connected your PayPal account to your bank account and this, in turn, connected your PayPal to eBay. Because PayPal processed all payments this allowed bank-level security from beginning to end and did not require that sellers provide their banking details to eBay.
It’s not surprising that those days have come to an end. While PayPal was processing payments they would take a flat $.30 plus 2.9% of the transaction. This added up to hundreds of millions of dollars per year.
While this was a good solution, you can’t expect a profit-driven company such as eBay to let that amount of money go somewhere else.
eBay launched its payment system and, as of 2021, has made it mandatory for sellers to opt-in. eBay simply connects directly to your account and pays you by direct deposit (after subtracting fees, refunds, etc.)
This means no more PayPal. It isn’t even an option.
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If you don’t make the switch from PayPal to eBay’s Managed Payments you won’t be able to list or sell anything as your account will be limited.
Is eBay’s Managed Payment System More Secure Than PayPal?
Many sellers are concerned with the amount of information that eBay is now asking them to disclose. For Managed Payments, this included not only your bank account information (so that eBay can make deposits and withdrawals) but your social security number as well.
You cannot sell on eBay without providing your bank account (for deposits) and your SSN (for tax purposes). Sellers who do not provide both and opt into eBay’s new payment system will have their accounts limited.
We have personally used eBay Managed Payments for over a year now. Do I love it? No. It has several drawbacks when compared to PayPal. However, I haven’t had any unusual withdrawals from my accounts, I still get paid, and my identity hasn’t been stolen.
That’s not to say that it can’t happen (and I do maintain a separate “business” bank account for eBay) but I haven’t faced any problems thus far.
Can I Use PayPal Working Capital With eBay Managed Payments?
One of the biggest losses (in my opinion) of eBay’s break with PayPal is that sellers no longer have easy access to PayPal Working Capital. In the past, getting a loan was as easy as applying and choosing the amount that you wanted. Payments were automatically deducted from your eBay sales so you never had to worry about a thing. No more.
eBay has taken this service in-house as well by offering eBay Seller Capital (although it is backed by LendingPoint).
We used PPWC for many years and loved the simplicity. We have heard a ton of complaints about eBay’s new loan system and so have chosen not to dip our toes in that water unless we absolutely need to capitalize on an opportunity.
Other Disadvantages of Not Having PayPal on eBay
Selling on eBay without PayPal comes with some other significant disadvantages that have many sellers upset.
The biggest problems are:
- Slow Payments. While you can choose a daily payout, eBay does not pay until the payment is processed and cleared by them which can take a day or two. From there is can be an additional 2-3 days to reach your bank account. This means that many sellers have a 3-4 day delay (not including weekends) from selling an item to getting paid.
- Shipping comes out of your pocket. You used to have your money in PayPal immediately which meant that you could use the money from the sale to pay for shipping supplies and a label. Because of the delay sellers do not have to fund their shipping expenses out of pocket and wait to be reimbursed by their payout.
- Dropshipping is much more expensive. You might consider this a positive or a negative but dropshipping on eBay has been a huge business for many people. After selling an item, dropshippers would use the money from the sale to purchase it elsewhere and have it shipped. With the payment delay, dropshippers now have to fund the product purchase on their own and then wait for payment.
- Refunds and fees are taken automatically. All-in-all, eBay has taken from sellers much of the financial control of their business. eBay fees are taken automatically, refunds are given automatically, etc. What’s more, where exactly your money is going is somehow less clear even though it’s all in one place. It’s as if eBay is saying “Just trust us and be happy with the money we decide to pass along to you.”
Doesn’t eBay Own PayPal?
PayPal first went public in 2002 and was a fully owned subsidiary of eBay by the end of that year. eBay owned PayPal from 2002-2015 after which they split and PayPal again became its own company again.
As of 2015, eBay no longer owns PayPal. eBay has no plans to remove PayPal as a payment option for buyers but no longer processes payments with them. Amsterdam-based Adyen handles all of eBay’s payment processing.
eBay has replaced PayPal with Adyen (not “Ayden” as many people try to spell it) as their primary payment processor. Adyen is a Dutch company that first signed a contract with eBay in 2018 to start providing payment processing for customers on the site. It is expected that Adyen with process 100% of eBay’s payments sometime in 2021.
So, yes, you can now sell on eBay without PayPal. However, the new options are not much improved. You still have to have a bank account and you still have to provide a good deal of personal information for your payments to be processed.
See you out there!