EBay Managed Payments Review: Pros, Cons, How It Works

EBay processes customer payments for eBay sellers using an internal system called eBay Managed Payments. It was phased in from 2018 to 2021, replacing PayPal as eBay’s payment processor.

» MORE: What is a payment processor?

Deciding factors for eBay Managed Payments

How it works

1. You’ll link a checking account when registering for an eBay account.

2. The eBay Managed Payments system processes the customer’s payment, and eBay deducts the payment processing fee and a commission before sending the remaining funds to you.

3. Funds are usually transferred within two business days, though it can take another few days for the bank to release the funds to your account.

4. ​​You can pay for shipping using funds that haven’t yet reached your bank account. For example, say you sold an item for $100 on Saturday and expect to receive $85 after fees on Wednesday the following week. You can use a portion of that $85 as soon as the item sells on Saturday in order to get that item to your customer as soon as possible.

Pros

Managing one set of fees is simpler than managing two. Prior to eBay Managed Payments, sellers needed to maintain accounts with eBay and PayPal and pay fees to each. Now, the payments process is streamlined as eBay processes payments and transfers funds to your bank account in addition to hosting the sale itself. You pay eBay for those services using a single fee structure.

Helpful tie-ins with other eBay services. Managed Payments takes advantage of its place within eBay, like the ability to immediately use funds from approved sales to pay for shipping costs.

Cons

Combined fees make it impossible to know what you’re paying for each service. The fee you pay covers eBay’s commission and payment processing, but it’s impossible to know how much of that fee goes to each. Bundled costs might be convenient, but more transparency into what you’re paying for could help you better evaluate the value you receive when selling on eBay.

You don’t have other options. The average seller isn’t signing up for eBay because of Managed Payments: They’re signing up to gain access to more than 150 million shoppers who use the site. You must use it if you want to use the site, and you can’t use eBay Managed Payments anywhere else, so the real decision is whether you want to sell on eBay.

Alternatives

If you’re selling handmade or vintage items: Etsy. Its payment processing fees are high relative to companies like Stripe or Adyen, but the combination of its payment processing and commission fees is significantly lower than eBay’s.

For treasure hunters: eBid. People often turn to eBay to find old, unusual or hard-to-find things. Auction site eBid is a lower-cost alternative, charging fees ranging from 2% to 5% of the sale price, plus a flat fee, plus payment processing fees paid to PayPal. EBid does not have the same reach as eBay does, but its bona fides include a respectable 2.5 million listings and more than two decades in business.