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eBay has had enough — or so it seems based on the e-commerce company's scathing statement issued this morning. The swipe fees it incurs every time you charge an eBay purchase to your American Express credit card are too much to bear in its view. And as a result, eBay is cracking down on what cards you can and can't use to shop its website.
Here's what eBay users need to know.
eBay To Crack Down on What Cards You Can Use at Checkout
Credit card interchange fees are a controversial topic. It's how the card issuers makes money — and how they fund rewards programs you know and love. Merchants, on the other hand, don't care for them as much. After all, 1% to 3% of your transaction amount — plus, at times, a flat fee — goes to the issuer. That's money that the merchant doesn't get to keep.
American Express is known for having some of the highest interchange fees of all card issuers. In fact, its swipe fees are one of the main reasons Costco walked away from an exclusive 16-year-long partnership with Amex eight years ago. High fees mean lost revenue for businesses, and that's why you can no longer use an Amex card to shop at Costco.
And in August, high interchange fees will spell the end of another business relationship — this one non-exclusive, like the one with Costco.
eBay has signaled a change come August 17, 2024, after which customers won't be able to pay for purchases with American Express credit cards. Simply, eBay found Amex's swipe fees to be “unacceptably high.” It'll share more details about its decision with customers in the near future.
Muted last-quarter earnings likely drove eBay to make the call. Although, as user forums indicate, eBay has sporadically not allowed Amex cards in the past. So, whether or not this restriction sticks is anyone's guess. In a statement to AwardWallet, eBay put the ball in Amex's court:
“We are always willing to engage in discussions with partners such as American Express.”
In response to eBay's decision, Amex issued a statement sharing its disappointment but mentioned that “eBay represents less than 0.2% of our total network volume. American Express Card Members can continue to use their Cards with millions of merchants around the world.”
In other words, “We’ll be fine without you; don’t try to flex on us.”
Related: The Best Credit Cards for Online Shopping
Final Thoughts
On August 17, 2024, eBay will no longer accept your American Express credit card. You'll have to use a card from another issuer. This move is unfortunate if you've habitually used a Membership Rewards-earning card to cover your purchases. And it's just the latest example of Amex's high fees making life difficult for cardmembers.
Will you be able to check out with PayPal as your payment method and set an Amex card as your default card within PayPal? We'll see.
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