eBay Admits Earning Interest In Payment Terms Update October 2023
eBay has updated the Payments Terms of Service for US, UK, Canada, and Australia, but curiously has only made announcements for UK and Australia so far.
For all sites the new terms are effective from November 1, 2023 for sellers who accept these Payments Terms of Use during new seller registration or otherwise on or after that date.
For existing sellers, these new terms go into effect November 15, 2023 for US and Canada; November 30, 2023 for Australia; and January 1, 2024, for the UK.
There are mostly minor changes, like adding additional language around eBay's obligations to collect and provide tax information due to new regulations in Europe.
However, eBay is finally acknowledging they do in fact earn interest on payments and has given themselves the option to only payout to new sellers once a month - which of course would allow them to earn more interest as they hold those funds.
As always, it is highly recommended to read the full terms and conditions for yourself, but we've highlighted a few important changes :
Disputes
Additional language added to specify certain rights retained by small businesses in Australia regarding dispute resolution.
Old version:
You will not contest the resolution of any Dispute that we investigate and/or re-present, nor will you re-open resolved Dispute investigations. If you are a consumer in the EU, UK or Australia, your rights to file a complaint or to take legal action in court remain unaffected.
New version:
You will not contest the resolution of any Dispute that we investigate and/or re-present, nor will you re-open resolved Dispute investigations. If you are a consumer in the EU, UK or Australia, or a Small Business within the definition of Small Business Contract (as defined in s23 of Schedule 2 – Australian Consumer Law of the Competition and Consumer Act 2010 (Cth)) (“Australian Small Business”) in Australia, your rights to file a complaint or to take legal action in court remain unaffected.
Seller Protection
Language was added to include claims for unauthorized transactions with Spendable Funds to seller protection.
Old version:
If you have met your eligibility requirements for, and fulfilled all your applicable obligations, under the Seller Protection policy, you will not be held liable for any amounts to be returned to buyers due to eBay Buyer Protection Program claims and Disputes.
New version:
If you have met your eligibility requirements for, and fulfilled all your applicable obligations, under the Seller Protection policy, you will not be held liable for any amounts to be returned to buyers due to eBay Buyer Protection Program claims, Disputes or unauthorized transactions with eBay spendable funds.
Holds
Amended to add eBay will hold funds if required by their tax reporting obligations from EU DAC7 legislation.
Old version:
We also may cancel or freeze the settlement of your proceeds as necessary to comply with our legal obligations in connection with fraud prevention, risk management, or regulatory compliance. Any hold placed on your funds will be lifted when the issue is resolved.
New version:
We also may cancel or freeze the settlement of your proceeds as necessary to comply with our legal obligations in connection with fraud prevention, risk management, or regulatory compliance,or, upon lawful request by our Affiliates, to enable them to comply with legal obligations applicable to them (such as compliance with tax-related obligations from EU DAC7 legislation). Any hold placed on your funds will be lifted when the issue is resolved.
Receipt and Settlement of Funds
Added a section to clarify payments are not deposits, are not FDIC insured and any interest earned will be retained by eBay, not paid to the seller.
New section:
Funds received by us on your behalf represent an unsecured claim for payment against us, but do not constitute deposits; nor are these amounts eligible for FDIC pass-through insurance. eCI may combine your funds with the funds of other eCI customers in pooled custodial accounts and invest the funds in accordance with state money transmitter laws.
You do not have any ownership interest in these investments and any interest earned from these investments will be retained by us. To the extent you may have any beneficial ownership in the interest or proceeds of these investments, your acceptance of these terms constitutes an assignment of any right, title or interest therein to us.
This section finally puts to rest questions raised in July 2023 when some savvy sellers noticed eBay help and policy pages which previously stated eBay did not earn interest on payments had those statements removed.
Liz Morton
eBay also makes it clear in this section that when onboarding into Managed Payments, sellers may not initially be put on the fastest payout schedule - which means eBay can decide that new sellers only get paid once a month while making interest on those held funds!
Old version:
Your transaction proceeds, other than those being held in accordance with these Payments Terms of Use, and subject to the estimated settlement times set forth in the next sentence, will be aggregated to a daily batch for settlement to you on a regular basis (for example, a single daily settlement for all transactions ready for disbursement to you that day), unless otherwise requested by you and agreed to by us.
We anticipate that Managed Payments transaction proceeds will generally be settled to your Linked Financial Account approximately two to seven business days after the buyer's transaction, although actual settlement times may vary for individual transactions based on circumstances such as your bank’s processing times.
New version:
Your transaction proceeds, other than those being held in accordance with these Payments Terms of Use, and subject to the estimated settlement times set forth in the next sentence, will be aggregated to a batch for settlement to you on a regular basis (for example, a single daily settlement for all transactions ready for disbursement to you that day), unless otherwise requested by you and agreed to by us.
We anticipate that Managed Payments transaction proceeds will generally be settled to your Linked Financial Account approximately two to seven business days after the buyer's transaction, although actual settlement times may vary for individual transactions based on circumstances such as your bank’s processing times.
Notwithstanding the foregoing, when you onboard to Managed Payments, we may initially place you on a different payout schedule (no less frequently than monthly) and will communicate the applicable payout schedule to you in My eBay or Seller Hub.
Keep in mind, new or infrequent sellers are already subject to up to 14 day holds on funds processing.
New or infrequent sellers will experience transaction holds while learning best selling practices. This helps sellers become established and build a strong selling history on eBay. New sellers typically experience holds for up to 14 days, although sometimes it may be longer.
However, that is just the time to make funds "available" to be paid out - with this new addition to the payment terms, eBay can also put new sellers on a slower schedule to have those funds paid out once available, which could potentially push the actual deposit time out 30 days after the initial 14 day hold is complete and the funds are "available".
RatePay
Everything in the previous terms of service regarding the use of RatePay in Germany has simply been removed in this latest update with no replacements, indicating eBay likely has no plans to re-enable the service after it was "temporarily" suspended in 2021 due to fraud concerns.
Liz Morton
As updates go, this one is likely to have a relatively minor impact on most established sellers, though we'll be keeping on eye on how the terms about earning interest and new seller onboarding payout schedules plays out.
Let us know what you think of this eBay Payments Terms of Service update in the comments below!
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Excerpts provided are not meant to be an exhaustive list of all changes to the User Agreement. As always, we recommend reviewing all terms, conditions and agreements before using the eBay platform.
