Ebay managed payments vs Paypal

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eBay Managed Payments vs PayPal


Ever since eBay rolled out its managed payment system in 2018, buyers/sellers on the platform have shared mixed views about the leap. In short, discussions around the eBay managed payments vs PayPal comparison have driven (and still drive) massive engagement across blogs and in the eBay Community.

eBay's 180+ million users share no collective preferred payment system. While some buyers/sellers appreciate PayPal's services, others believe that the birth of eBay-managed payments is a step in the right direction.

An overview of the PayPal and eBay payment systems

PayPal is a leading payment system offering payment solutions to users in over 200 countries. With a massive customer base of over 390 million active users, the platform meets the financial needs of individuals and businesses.

On the other hand, eBay-managed payments is a payment method that grants eBay total control of the end-to-end payment process. This payment method, which uses Adyen, keeps transactions on the platform (rather than redirecting users to a third-party website).

Pros and cons of eBay managed payments

Pros of eBay managed payments

1. Direct transfer of funds to sellers' bank accounts

eBay handles payment transactions, and payouts are transferred directly to the seller's bank account.

2. Lower processing fees for most sellers

With eBay-managed payments, you can spend less and save more when you sell just one item per transaction (since eBay calculates fees per listing sold).

3. Ease of buying

You don't need to create a PayPal account before purchasing an item since you can directly use your debit or credit card. eBay reduces the stress that accompanies payment processing—helping buyers make payments easily.

4. Variety of accepted payment methods

eBay's payment system allows buyers to pay through various channels, including credit/debit/gift cards, Apple Pay, Google Pay, PayPal, and PayPal Credit.

Cons of eBay managed payments

1. Delayed fund deposit

eBay assures sellers of a two-day fund transfer period. However, sellers still experience occasional delays extending to 48 hours or even a week.

2. Shipping delays

eBay's occasional delays in the release of funds may cause the shipping of goods to take longer than necessary, especially in cases where sellers ship goods only after confirming deposits. Unfortunately, repeated shipping delays could make a seller lose a significant number of customers.

Pros and cons of PayPal managed payments

Pros of PayPal managed payments

1. Optimum account security

PayPal goes the extra mile to ensure that accounts are secure. So, the chances of a buyer making a fraudulent purchase are very slim. Even if this happens, PayPal has a system that helps buyers recover their money fast.

2. Ease of use

It's pretty simple to process transactions using PayPal. Its simplistic model makes it easy to use and understand on both ends.

3. Zero maintenance fee

PayPal will never charge you for owning an account. Charges only apply when you initiate a transaction.

4. Diverse currencies support

PayPal enables users to make payments in 26 different currencies across various countries around the world.

Cons of PayPal managed payments

1. High transaction processing fees

PayPal's fees are considerably higher than other online payment methods and traditional payment systems.

2. Account freezing issues

PayPal is known to block sellers' accounts without prior notice. In many cases, PayPal withholds funds, freezes accounts temporarily, or even shuts them down permanently at the slightest suspicion or buyer dispute.

The future of PayPal and eBay managed payments

While the comparison between eBay-managed payments vs PayPal has long remained a hot topic among eBay's buyers/sellers, the narrative seems to be changing quickly—in favor of eBay-managed payments.

eBay recently rolled out new terms that present the managed payments system as "compulsory" for sellers (starting June 1, 2021).

Following the new terms, buyers will still have the option to pay via PayPal Credit and PayPal (alongside other payment methods like Google Pay, Apple Pay, and debit/credit cards). However, unlike before, sellers will have to embrace eBay-managed payments to continue selling on the eCommerce platform.

A significant downside to eBay's new stand is that, from now on, sellers will have to wait two working days to receive payments (unlike PayPal that processes funds on the same day).

Processing fees have also changed. Previously, sellers paid a 10% final value fee plus PayPal fees plus $0.30. The new system excludes PayPal fees but attracts a 12.8% final value fee plus $0.30.

Keep buyers' eyes on your products with AccelerList


eBay's decision to make the managed payments system mandatory has raised heaps of dust amongst sellers. While some users now threaten to ditch the platform, others are still counting the cost.

Even though buyers have no cause to worry yet, it's easy for sellers to be distracted following the company's new terms and controversies. Thankfully, AccelerList can help get your products in front of your target customers at all times (whether you sell books, DVDs, or anything else).

Want to keep growing your eCommerce business despite all this payment noise? Start your 14-day free trial with AccerlerList today and overcome the hassle of product listing, repricing, cross-listing, and accounting.

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