Payment Choice Matters in eCommerce and Beyond

eBay has dropped American Express, saying its fees are ‘unacceptably high’ and customers have other options. The power of companies and individuals to pick up or drop payment providers exists thanks to diversity in the payments landscape, and cash remains a key pillar of this.

Cash on delivery can be an appealing option for eBay transactions, since the transfer of value is instant, private and without added fees. In contrast, cashless payment processors take a percentage of every transaction processed via their network, with America’s National Retail Federation saying the average credit card fee is around two percent, rising to around four percent for ‘premium rewards cards’ such as AmEx. There are also records of every cashless transaction, which may be positive or negative depending on individual circumstances.

eBay is not the first major company to quarrel with AmEx, following Costco—formerly a major partner of the corporation—dropping the cards in 2015. Today, CNBC quotes analysts at Keefe, Bruyette & Woods as estimating eBay sales at around 0.5 percent of AmEx’s worldwide network volume, making it ‘unlikely AmEx will budge much on pricing.’

This serves as a reminder of the importance of payment choice, including the acceptance of cash. The value of choice is immediately obvious for individuals—ensuring inclusivity and privacy—but it’s also relevant at the corporate level, enabling companies to walk away when they feel one provider’s terms are unfavourable, and even at the national level, with many countries recommending a cash stash to enable offline payments in the event of natural disasters or infrastructure attacks.

Offering a range of payment options—including cash, cards and other cashless options—empowers everyone with choice on a per-transaction basis and helps keep the payments landscape competitive.