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EBay Inc. (NASDAQ:EBAY) is set to stop accepting American Express Co. (NYSE:AXP) cards on its platform due to the “unacceptably high fees” charged by the company.
What Happened: The decision, which will be effective from Aug. 17, is a result of the ongoing negotiations between the two companies regarding the merchant discount rates, also known as interchange fees, Bloomberg reported on Tuesday. eBay will notify its customers of the change this week.
Despite Amex’s claim that its fees are comparable to those charged by other networks like Visa and Mastercard, eBay has decided to discontinue accepting Amex cards globally.
“American Express Card Members have an average transaction size at eBay that is more than double the transaction size of cards from other networks,” Amex said in a statement.
This move by eBay follows similar actions taken by its competitors, such as Amazon.com, during negotiations over transaction fees. Amazon had threatened to stop accepting all Visa cards before reaching an agreement. eBay has been losing market share to e-commerce giants like Amazon and Walmart in recent years.
Why It Matters: eBay’s decision to discontinue Amex cards comes at a time when the company is facing challenges in the e-commerce market, with a weaker-than-expected earnings outlook.
On the other hand, Amex has been experiencing growth in card member spending, which could make it more resilient to such changes.
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Photo via Wikimedia Commons
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
