7 ms·

If any Etsy employees are reading, I am curious about why it took nearly 7 years to add direct checkout to the site -- Paypal is not known for being particularl

If any Etsy employees are reading, I am curious about why it took nearly 7 years to add direct checkout to the site -- Paypal is not known for being particularly kind to either buyers OR sellers, though perhaps there were all sorts of scaling/technical issues that took priority over something like this? It just seems like, with the amount of volume that Etsy does, Paypal's rates would be on the very high side. Congrats - looking forward to trying it out!

alapshah 15y ago
Seems like it might be a pretty complicated thing to add... No other marketplaces that I know of have their own processing capabilities... Third party aggregation (taking payments on behalf of someone else) has many quite-complicated regulatory issues.
- gabaix 15y ago
  Yes. Also you need big sales volumes to justify the investment in time / money.
- patio11 15y ago
  In addition to the regulatory issues, you're asking to get a bunch of customer support complaints over $25 transactions where your maximum upside is measured in pennies. And many of those complaints are going to sound like: Buyer: "The seller never shipped the itemz!" Seller: "I did, too! With no tracking number, because I'm new at this, like most of your users!" Buyer: "I fell off the Internet for two weeks because I didn't pay my phone bill but I'm back now and hopping mad because the booties that just got delivered have WOOL instead of COTTON in them!" Seller: "It says right in the description NATURAL FIBERS!" Buyer: "There is nothing natural about FACTORY FARMS!" Accountant: "Total cost to read this email thread so far: $14 and counting. Value of this transaction to us: $0.57." Buyer + Seller: "YOU GREEDY CORPORATE BASTARDS."
blueprint 15y ago
Curious about that too. Recently we have some great alternatives like Stripe (https://stripe.com https://stripe.com ).
- alapshah 15y ago
  I asked them about this - they don't handle marketplace businesses (Taking money on behalf of another customer), for the same regulatory issues previously stated. PoundPay (also YC) is trying to solve this issue but I haven't heard a peep out of them... Also it is quite annoying because I paid for a zaarly and it showed poundpay on my statement, I had no idea what it was.
  - cwilson 15y ago
    PoundPay is super interesting, because from what I can see, only Amazon has a solution that essentially handles escrow transactions (which is what KickStarter uses). You're right however, I haven't heard much from them lately (as opposed to Stripe, who seems to be killing it). There was also a limitation with PoundPay of being US only, which is not an option for many companies.
    - zende 15y ago
      US merchants, international buyers -- just like Amazon (FPS) and Etsy's current systems. Which countries would you be most interested in us adding?
    - jjb123 15y ago
      Stripe's model depends on marketing and press, PoundPay has gotten really good word of mouth by the companies that currently use it (for our startup we've looked at our own processing, paypal, amazon, and just about all the options)
  - pbreit 15y ago
    Etsy could have implemented Stripe and not be the middleman while still offering a "direct pay-like" experience. Of course, each Etsy seller would need to sign up for Stripe. But I would think Stripe would be very keen on that.
mcfunley 15y ago
Once you are in the business of accepting payments from some people and dispensing them to others, you are playing an entirely different game from a regulatory standpoint.
- callmeed 15y ago
  How so? You're simply now a "Third Party Payment Aggregator". We do this with one of our products and we're a small operation. In my experience, the hard parts are getting initial approval from a merchant/bank and dealing with fraud. But I don't know of actual government regulations.
  - gravitronic 15y ago
    Based on the tax forms I've had to fill out whenever I've joined an app market or affiliate network, there is definitely government regulations with tax filing. My assumption is that since you're collecting money that is 3rd party's profit, you need to show the paper trail that you're holding this money in escrow for a 3rd party. This is why ebay transactions are buyer<->seller and then you're billed at the end of the month. Lightens the admin burden.
    - dangrossman 15y ago
      > Based on the tax forms I've had to fill out whenever I've joined an app market or affiliate network You mean the form W9 they have you fill out to provide your taxpayer identification number? That's so they can send you a 1099-MISC if needed. Any business that pays a non-employee individual over $600 in a year for any service (with a few exceptions) files a 1099-MISC, it has nothing to do with payment aggregation.
      - gravitronic 15y ago
        .. Right. And if your business is based on aggregating and paying out non-employee individuals then you will be filling out a lot of those documents, which becomes a significant added admin overhead...

alapshah 15y ago

Seems like it might be a pretty complicated thing to add... No other marketplaces that I know of have their own processing capabilities... Third party aggregation (taking payments on behalf of someone else) has many quite-complicated regulatory issues.

gabaix 15y ago
Yes. Also you need big sales volumes to justify the investment in time / money.
patio11 15y ago
In addition to the regulatory issues, you're asking to get a bunch of customer support complaints over $25 transactions where your maximum upside is measured in pennies. And many of those complaints are going to sound like: Buyer: "The seller never shipped the itemz!" Seller: "I did, too! With no tracking number, because I'm new at this, like most of your users!" Buyer: "I fell off the Internet for two weeks because I didn't pay my phone bill but I'm back now and hopping mad because the booties that just got delivered have WOOL instead of COTTON in them!" Seller: "It says right in the description NATURAL FIBERS!" Buyer: "There is nothing natural about FACTORY FARMS!" Accountant: "Total cost to read this email thread so far: $14 and counting. Value of this transaction to us: $0.57." Buyer + Seller: "YOU GREEDY CORPORATE BASTARDS."

blueprint 15y ago

Curious about that too. Recently we have some great alternatives like Stripe (https://stripe.com https://stripe.com ).

alapshah 15y ago
I asked them about this - they don't handle marketplace businesses (Taking money on behalf of another customer), for the same regulatory issues previously stated. PoundPay (also YC) is trying to solve this issue but I haven't heard a peep out of them... Also it is quite annoying because I paid for a zaarly and it showed poundpay on my statement, I had no idea what it was.
- cwilson 15y ago
  PoundPay is super interesting, because from what I can see, only Amazon has a solution that essentially handles escrow transactions (which is what KickStarter uses). You're right however, I haven't heard much from them lately (as opposed to Stripe, who seems to be killing it). There was also a limitation with PoundPay of being US only, which is not an option for many companies.
  - zende 15y ago
    US merchants, international buyers -- just like Amazon (FPS) and Etsy's current systems. Which countries would you be most interested in us adding?
  - jjb123 15y ago
    Stripe's model depends on marketing and press, PoundPay has gotten really good word of mouth by the companies that currently use it (for our startup we've looked at our own processing, paypal, amazon, and just about all the options)
- pbreit 15y ago
  Etsy could have implemented Stripe and not be the middleman while still offering a "direct pay-like" experience. Of course, each Etsy seller would need to sign up for Stripe. But I would think Stripe would be very keen on that.

mcfunley 15y ago

Once you are in the business of accepting payments from some people and dispensing them to others, you are playing an entirely different game from a regulatory standpoint.

callmeed 15y ago
How so? You're simply now a "Third Party Payment Aggregator". We do this with one of our products and we're a small operation. In my experience, the hard parts are getting initial approval from a merchant/bank and dealing with fraud. But I don't know of actual government regulations.
- gravitronic 15y ago
  Based on the tax forms I've had to fill out whenever I've joined an app market or affiliate network, there is definitely government regulations with tax filing. My assumption is that since you're collecting money that is 3rd party's profit, you need to show the paper trail that you're holding this money in escrow for a 3rd party. This is why ebay transactions are buyer<->seller and then you're billed at the end of the month. Lightens the admin burden.
  - dangrossman 15y ago
    > Based on the tax forms I've had to fill out whenever I've joined an app market or affiliate network You mean the form W9 they have you fill out to provide your taxpayer identification number? That's so they can send you a 1099-MISC if needed. Any business that pays a non-employee individual over $600 in a year for any service (with a few exceptions) files a 1099-MISC, it has nothing to do with payment aggregation.
    - gravitronic 15y ago
      .. Right. And if your business is based on aggregating and paying out non-employee individuals then you will be filling out a lot of those documents, which becomes a significant added admin overhead...