eBay Stops Accepting American Express Due to High Fees

eBay has officially ceased accepting American Express credit cards as of August 17, following a decision announced 2.5 months prior. The online auction giant cited "unacceptably high" processing fees as the primary reason for this change. In a statement released on June 5, eBay expressed concern that, despite advancements in technology and fraud prevention, credit card transaction fees continue to rise due to a lack of competition in the industry. The decision to drop American Express came after negotiations between the two companies reached a stalemate. eBay, which reported $10.1 billion in revenue for 2023, is advocating for stronger regulations on credit card issuers to foster competition and lower transaction costs for both merchants and consumers. The retailer's move has sparked a response from American Express, which expressed disappointment and claimed that the decision would limit payment options for customers, potentially diminishing the service, security, and rewards associated with using their cards. American Express noted that eBay accounts for less than 0.2% of its total network volume, suggesting that the impact of this decision may be minimal for the credit card issuer. However, the broader implications of high transaction fees are significant, as they represent one of the highest operating costs for retailers, second only to labor. The National Retail Federation indicates that these swipe fees can increase consumer prices, costing the average household over $1,000 annually and potentially reducing retail sales.