Aug. 17 (UPI) — A decision by online auctioning giant eBay to stop accepting American Express credit cards due to what it calls “unacceptably high” processing fees officially took effect on Saturday.
The change came 2 1/2 months after the bidding platform announced to its users it would drop American Express as a form of payment as of Aug. 17.
“At a time when payment processing costs should be declining because of technological advancements, investments in fraud capabilities and customer protections by merchants like eBay, credit card transaction fees continue to rise unabated because of a lack of meaningful competition,” the June 5 statement read.
In making the move, the retailer, which logged $10.1 billion in revenue during 2023, called for “more robust regulations” on credit card issuers in order to “drive greater competition” in the industry and “help reduce transaction processing costs for merchants and their customers.”
The decision to drop Amex came after negotiations between the two side had reached an impasse.
The credit card issuer said in June it was “disappointed” in the move but otherwise dismissed its impact, claiming eBay’s decision “will limit customers’ payment choices and take away the service, security, and rewards that customers value when paying with American Express.”
It noted eBay “represents “less than 0.2% of our total network volume.”
The transaction or “swipe” fees are charged by card issuers to merchants when consumers use their cards to make a purchase. The fees average just over 2% of the transaction but can be as much as 4% for some premium rewards cards, according to the National Retail Federation.
The retailers say swipe fees are their highest operating cost after labor, driving up consumer prices by more than $1,000 a year for the average household, while also “hurting retail sales because consumers buy less when prices go up.”