Paypal Changes on Etsy – What You Need to Know

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You may have received a notice from Etsy saying that you could switch your Paypal over to Direct Checkout, or Etsy would do it for you on October 27th – today. This email from Etsy is legitimate, it is not a scam or spoof email.

What Does the Paypal Change Mean for Existing Etsy Sellers?

• Paypal will automatically be migrated into Direct Checkout on October 27th.
• Earnings from Paypal transactions will be deposited into your Shop account and dispersed weekly (or whenever you choose).
• You have the ability to revert your account back to having Paypal not through Direct Checkout until December 31st.
• If you currently do not have a Paypal account connected to your Etsy shop, your customers will be able to pay through Paypal using Etsy’s house account. The customer’s receipt will then show Etsy’s Paypal address instead of yours.
• If you use Paypal within Direct Checkout, your payment processing fees will be 3% + 0.25 USD, rather than two different formulas.
• The shift of Paypal to Direct Checkout means that Etsy policies will govern disputes against sellers – rather than the policies of Paypal.

What Does this Mean for New Etsy Sellers?

• If you set up a shop on or after October 27, you will accept Paypal through Etsy’s Direct Checkout.

Personally, I like the new system for two reasons. 1) Your accounting is easier because all of your funds are in one place. 2) Etsy’s claim system historically favors the sellers as long as they have followed all Etsy’s policies; while Paypal historically sides with the buyer. Also, the time frame for a seller to file a claim on Etsy is 60 days, while Paypal extends the claim time frame to 180 days. Etsy notes that whether or not the claim is within their 60 day time frame, they will directly deal with the customer. Only time will tell if Etsy will continue to side with sellers with Paypal within Direct Checkout.

What do you think of this change? Do you love it, hate it, or are you indifferent? Let me know in the comments.

Christine Schinagl, Cutting for Business

Since 2015, Christine Schinagl has been helping crafters start and run craft businesses through her blog, Cutting for Business. As a Silhouette and Cricut crafter herself, she has a unique take on what works and what doesn’t work in the craft business world. She also teaches a course on creating digital SVG designs, available at How to Design SVGs.

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