eBay has announced it will cease accepting American Express as a payment method, citing the high fees charged by American Express for processing transactions.
The decision was influenced by inflation and rising costs for consumers and small businesses, eBay said.
eBay's move, effective August 17, will make eBay the only U.S.-based online marketplace not to accept American Express, joining other global marketplaces like JD.com and Etsy's subsidiary Depop in this policy.
The announcement follows similar decisions by other major retailers.
Costco ended its partnership with American Express in 2016 in favor of Visa, while Capital One Financial and Walmart announced earlier this year the termination of their credit card partnership, which began in 2019.
eBay stated that a majority of its customers are willing to use alternative payment methods and highlighted the need for increased competition among credit card networks to reduce transaction costs.
A recent example is the latest update to Apple Pay, including a new "Tap to Cash" feature, announced earlier this month by Apple. The feature allows users to send and receive Apple Cash by simply holding two iPhone devices together.
Apple’s upgrade is the latest in a trending popularity of digital wallets, with Apple Pay increasingly being favored over PayPal for retail purchases.
Luxury brand Michael Kors, however, is leaning into credit card options, announcing new AI-driven technology from Dynamic Yield, a Mastercard company, to enhance its online shopping experience. The new Shopping Muse solution provides personalized product recommendations based on contextual and behavioral insights. The system uses integrated image recognition tools to suggest relevant products based on visual similarities, aiming to replicate the personalized in-store shopping experience online. Initial tests of the Shopping Muse have shown a 15-20% increase in conversion rates compared to traditional search queries.
The Federal Reserve noted that 84% of payments last year were made through non-cash methods, highlighting the shift towards digital transactions.
Gen Z, those born between 1995 and 2011, are facing increasing credit card debt. A TransUnion study revealed that 84% of 22-24-year-olds had active credit cards in 2023, a significant increase from previous generations. Additionally, the Federal Reserve Bank of New York found that nearly 15.3% of Gen Z Americans have maxed out their credit cards, exacerbated by inflation and high interest rates. These financial pressures highlight the need for better financial education and support for young adults.
Grocery retailer Meijer has added a lower-income credit option, releasing an update that allows customers to utilize Supplemental Nutrition Assistance Program (SNAP) benefits on its mobile app. This allows SNAP participants to use their Electronic Benefits Transfer (EBT) cards for purchases on the app, covering more than 100,000 items. Meijer also offers a 10% discount on qualifying produce and free home delivery for SNAP purchases.
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