Paypal and eBay have long been partners, however this is all changing. This guide is about eBay Managed Payments changes to Seller fees and how it affects you. Don’t get caught out by the new fees being introduced as I explain everything that’s happening. This article will be updated as new information is released.
Soon sellers will be paid directly into their bank rather than into PayPal accounts. Paypal will no longer be taking that 2.9% + 0.30p. Instead eBay themselves will be taking the money. That’s right eBay is increasing fees again.. but it wont feel like it this time for most. In fact you will be slightly better off! There will be some people who benefit from this and some that won’t. I will explain the pros and cons of the new system so you can decide what’s best for you.
Important! By eBay starting to manage payments in-house it can be a bit daunting. But it should be noted that you can still use Paypal to pay as a buyer. Just not as a seller. The changes are being gradually introduced to private sellers and should be completed by the end of 2021.
Check out my eBay fees selling guide which is a comprehensive, updated guide on all the fees for selling your stuff. Also don’t forget to use our NEW and updated eBay calculator to make sure you’re making the most money from your items.
How are eBay’s fees changing?
This is what’s happening for private sellers below (business sellers may pay slightly different fees):
Existing system: When an item sells, eBay charges a flat 10% of the sale price, including postage. PayPal’s cut is 2.9% of the final amount, including postage, plus 30p for each transaction. This was a total fee of 12.9% + £0.30.
Looking at our calculator here if you sold an item for £20 with £4 delivery eBay will take £2.40 while PayPal takes £1. This leaves you with £20.60.
New system: With the new system eBay will charge a final value fee of 12.8%, including delivery, plus 30p per order. There will be no Paypal meaning you will be marginally better off.
So take your £20 sale, plus £4 delivery, and eBay will take £3.37, leaving you with £20.63.
More Changes Incoming
Even if you take payment via ‘cash in hand’ you’re still going to be charged the full 12.8%. A lot of sellers could circumvent the Paypal fees by taking cash in hand but now that’s not possible.
Payments will now take a lot longer to process. Ebay is currently stating that money will take 2 days to reach your bank account compared to almost instantly when going to Paypal.
Important! You can schedule regular payments on a daily basis or even weekly. Note that cash will take longer to arrive if done on a weekend. If you sell an item and withdraw the money on a Sunday for example, you might not get it into the bank before Wednesday!
Buyers will have more ways to pay. You will now be able to pay using Apple Pay or Google Pay. In addition to the current Paypal cash or card, you can pay using PayPal, cash or card.
As it currently stands eBay have been rolling this out for a few years and by the end of 2021 everyone should be on the new system.
You will receive an email or message explaining the new system and inviting you to change over. It’s called an invite but realistically you have no choice, as eventually eBay will discontinue the old system.
There is a way to cut eBay fees down to £1.
As mentioned in our previous eBay Seller Guide every so often private sellers will have a £1 selling fee promotion. It didn’t used to include the PayPal fees but now you stand to make even more money when you sell an item because there is no PayPal!
Important tip! If the change means you’ll no longer use your PayPal account, ensure you completely close it down as PayPal is set to introduce an inactivity fee of £12 a year from 16 December 2020 for accounts that aren’t used for a year or more.
Don’t get caught out by eBay or PayPal during this transition period! I hope that the information on this post will prepare you for the future and that the website continues to help you all make your money go that little bit further!
For further information visit the official eBay Managed Payments page.