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Dive Brief:
- eBay said in a blog post Thursday morning that it will accept payments through Venmo, one of the most popular online payment apps.
- The move comes a week after it said it would no longer accept American Express, citing high fees charged by the credit card provider.
- Venmo is popular among young people in the United States. The payment app boasts 90 million users, 28% of which are between 18 and 29 years old.
Dive Insight:
When eBay announced it would drop American Express last week, it insisted that it would expand options for its customers, but offered few details.
It provided a clue on Thursday with a blog post announcing that eBay users will soon be able to pay with Venmo.
The company did not say precisely when customers can pay with Venmo, but said it will happen soon. “The ability to pay with Venmo will be widely available on eBay.com and the eBay app in the coming week,” the blog post reads.
The move comes almost exactly three years after eBay ended it’s partnership with Venmo’s parent company Paypal. In 2021, the auction site said it would continue to allow users to buy items using Paypal, but the money paid to sellers would go straight into their bank accounts.
eBay bought Paypal in 2002, but the two companies separated in 2015.
Letting users pay with Venmo simplify the payment process by letting users connect their Venmo and eBay accounts, the company said. “Once buyers have linked their Venmo account to their eBay account, they can sail through checkout without manually entering their payment details in subsequent transactions,” the blog post reads.
When eBay dropped Amex last week, it blamed the credit card companies’ high fees, which it said are costlier than other credit cards. Amex countered that its fees are comparable to other credit card companies, although neither party said exactly what American Express charges.
While most credit card companies charge fees equal to 1.5% to 2.5% of the transaction, Amex charges between 2.5% and 3.5%, according to Bankrate.
Amex downplayed eBay’s decision, but the move was still a blow to the credit card provider, which had made headway with U.S. merchants in recent years. Just 3.7 million merchants accepted Amex in 2014, according to the Nilson Report, but that number swelled to 10.6 million by the end of 2019
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