Etsy Seller Banking Verification Requirement Is the Latest Grievance To Upset Sellers
Etsy has some sellers upset again with Friday’s announcement that US-based sellers will have to verify their bank account information with the marketplace.
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“In connection with anti-money laundering and related regulations in the United States, marketplaces like Etsy are adjusting practices to further verify any American bank accounts on file. This is to protect your account as well as the Etsy marketplace,” Etsy said announcing the requirement.
News service Reuters talked with a few Etsy sellers – some who wished to stay anonymous – and found that this requirement is not sitting well with them.
One point of contention is that Etsy selected Plaid, a financial services company that operates a data transfer network connecting banks with digital applications.
This year the company agreed to pay a $58 million settlement in a class-action lawsuit over allegations it scraped data from users without their consent.
“This is so typical of Etsy on any controversial subject, but when it has to do with our finances, it’s unacceptable,” said Dorothy Domingo, a long-time Etsy seller to Reuters.
“Unfortunately, a history of less-than-stellar communication and customer service contributes to a general lack of trust in Etsy,” added another seller to Reuters who wished to remain anonymous.
As online marketplaces like eBay and Etsy transitioned from third-party financial service companies like PayPal to manage the financial side of the transaction to in-house payment solutions, they must follow more financial federal rules and regulations.
While some sellers feel these requirements are too burdensome or intrusive, the fact is they are becoming the norm across the digital economy.
This verification requirement is just the latest pain point for some sellers — who earlier this year went on a strike to protest the company’s 30% fee increase, including several other issues that have plagued the platform for years.
And while Etsy never directly acknowledged the issues raised by the strikers, the company did address some of them in recent platform updates.
Kristi Cassidy, one of the leaders of the Etsy Strike, said to the Providence Business News (PBN) that Etsy policies are “still a problem, but it’s gotten significantly better.”
Etsy Sellers Forming Guild
Despite addressing some of the problems, Cassidy, along with other Etsy sellers, are forming the Indie Sellers Guild to continue to focus on highlighting policy problems at Etsy.
The Guild will officially launch at 1 pm on Monday, September 5 (Labor Day) in a virtual event at indiesellersguild.com/launch. The launch will include a panel discussion with Guild leaders.
Cassidy said policies the Guild will focus on will be determined by the membership, but an early poll suggests that resellers are the top concern.
However, with this new account verification requirement being the latest pain point, it’s likely to make the top of the list of grievances as well.
Cassidy said to PBN, “The only thing that inspires Etsy to make changes to help its sellers is bad publicity, so we’re going to keep at it and gather more people to our side.”
While she has a point that some recent policy updates seemed to address a few concerns, the issues Etsy addressed were not the “big ones.”
And it is not very likely that Etsy will make any significant changes since complex policy enforcements are very expensive and may also hurt sales.
Moving forward from these early wins, the Guild will have a big mountain to climb as Etsy’s second-quarter results came in stronger than expected, which covered the time of the original strike in April.
And that was no small accomplishment for an online commerce company during the second quarter earnings season.
Many of Etsy’s online peers faced headwinds from shoppers returning to retail stores and warned of slowing sales or growth.
Ultimately, that will be the real defining criteria of what policy changes Etsy will make to keep sellers happy.
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Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.