An Update on eBay’s New Managed Payments System

Attracting debate from the very first announcement in 2018, eBay’s new managed payment system has been controversial to say the least.

With more and more sellers transitioning to the managed payment system, concerns and opinions have become even more amplified.

As a follow-up to summarization post in early 2020, this post will examine further the discussion that surrounds eBay’s managed payments system.

What is managed payments?

Put simply, managed payments is eBay’s new in-built payment system. It enables buyers to pay for their purchase right on the eBay platform, without having to use a third party money processor such as PayPal. In turn, sellers will receive payment directly from eBay.

Managed payments is enabled by Adyen, a company that specializes in back-end payment systems for online merchants,

eBay estimates that they will manage payments for ‘most of its marketplace sellers by 2021.’

Why the managed payments system is so controversial

The following arguments against the managed payments system are, by far, the most common.

A forcible switch

Eventually, all sellers will be required to register for managed payments to continue using eBay.

This is a major point of contention, especially with veteran eBay sellers who have been selling on this online marketplace for decades. It is understandable that some sellers would prefer to stay with a payment processer that works well for their business.

Another potentially frustrating aspect of this forcible switch is the removal of choice. There is the argument that the majority of sellers would eventually move to managed payments if it was the superior option that eBay promotes to be.

Seller preferences have been ignored in the name of progress and eBay is effectively telling sellers to either join the program or leave.

Payment delays

Sellers using managed payments can choose a payment schedule, with the choice of getting a daily or weekly payout. Once the payout has been initiated (‘as quickly as 2 business days after order confirmation’), the funds are subject to bank processing times, usually 1-4 business days.

For some sellers, this is simply too long to wait for payment, especially since the managed payments system does not pay out on weekends.

More recently, sellers have also been experiencing payout failures. These payment glitches further decrease seller trust in eBay.

Higher fees

eBay claims that ‘most sellers can expect to see overall savings on fees.’ The usage of ‘most’ does seem to be appropriate since there are groups of sellers who pay more fees with managed payments.

To understand how this is possible, it’s important to grasp the change in the post-sale fee structure.

Under the ‘old’ system (which is being phased out), sellers pay a 10% Final Value Fee on the total amount of the sale. For transactions processed by PayPal, the seller will pay an additional 2.9% as well as a flat $0.30 per order fee.

With managed payments, sellers pay a 12.35% Final Value Fee and flat $0.30 per order fee to eBay.

For many sellers, the ‘new’ fee structure shows only negligible differences. A minority, however, do lose out.

*Please note – the above percentage rates relate to items sold in most categories, by sellers who do not own a Store and do not have Top Rated Plus listings.


To use the managed payments system, sellers must provide identity verification, bank account details and business information. On, this includes providing your Social Security Number (SSN).

Understandably, providing this kind of personal information makes many sellers feel uncomfortable and even suspicious.

eBay is legally bound, however, to report sales over a certain threshold to the IRS, a process which requires a SSN. Bank account details are needed to deposit payments directly to sellers.

Even with this explanation, it still seems reasonable for sellers to feel anxious or unhappy about the level of information being required by eBay.

To solve this issue, some sellers have opened separate bank accounts.

Does the managed payments system have any advantages?

Although some eBay sellers may vehemently disagree, there are some advantages to the new managed payments system.

Depending on your point of view and personal experiences on eBay, these advantages may or may not feel significant.

Some of the most cited arguments in support of eBay’s new managed payments systems are:

  • An in-house payment system is inherently more convenient – no need to deal with two separate entities (e.g. eBay and PayPal)
  • Fees are removed automatically, removing the need for a bill
  • Managed payments streamlines accounting processes and yearly reconciliation
  • Ayden has an excellent reputation and track record concerning security protocols
  • Managed payments are scheduled and therefore predictable
  • Buyers have more choice concerning their payment method, a factor that could increase sales
  • PayPal is not a perfect payment solution (see below)

PayPal vs. Managed Payments

PayPal has been associated with eBay for decades and is the payment method of choice for the majority of eBay transactions.

The managed payments system does have some notable advantages over PayPal, however.

One example concerns returns. For each sale, PayPal charges a processing fee of 2.9% and $0.30 of the total selling price including the sales tax. In the instance of a return, PayPal does not refund any fees. With managed payments, the seller loses the $0.30 per order fee but is usually credited the percentage based Final Value Fee.

PayPal’s 180 day dispute window has been a longtime frustration for eBay sellers. This becomes less of an issue with managed payments.

If a buyer pays for an item using PayPal via managed payments, then opens and loses a case on eBay, then tries to open the same case on PayPal, eBay will fight on behalf of the seller and cover any necessary loss.


The new managed payments system is not a perfect system, nor one that is favorable to all eBay sellers.

Some sellers have embraced the change after experiencing lower fees and a streamlined payment system. There are others, however, who find the payout process to be perceivably slower and less convenient.

For a lot of eBay sellers, the biggest problem with managed payments is the forced nature of the transition.

In addition, this mandatory change comes with the requirement to disclose personal information and bank account details. For some, this may prove to be breaking point and a reason to sever ties with eBay.

Gemma is our all things eBay expert. Originally from the UK, she now lives in Canada and travels extensively. You can read about her travels at her blog Off Track Travel.

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