Etsy, other e-commerce companies feel squeeze of SVB collapse
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Etsy on Monday resumed payments to merchants with Silicon Valley Bank accounts after the e-commerce platform paused their payouts over the weekend following the U.S. government shutdown of the bank last week.
Approximately 0.5% of Etsy’s active sellers -or around 2,700 merchants- had their payments delayed on Friday related to SVB’s collapse, according to Etsy.
“We are working to pay these sellers today, and we’ve already started processing payments via another payment partner this morning,” an Etsy spokesperson told Reuters on Monday.
The payments Etsy sellers received is unrelated to the Federal Reserve’s Sunday announcement, which ensured that SVB’s customers would have access to their funds on Monday.
Shopify SHOP.TO, which provides websites and apps to stores, also halted payments to online sellers with Silicon Valley Bank accounts, telling merchants they must switch accounts to receive funds, according to the company’s website.
Etsy and Shopify each work with 5.4 million and 1.75 million online merchants respectively worldwide, mostly small-to-medium size businesses.
Some Etsy sellers decided to put their stores on vacation mode, pausing customer purchases in an effort to minimize their financial losses while others say they have received their payments on schedule.
Moshe Steinberg, 31, said that he received a payment from Etsy on Monday morning, but is still waiting for it to clear with his bank.
“It was a nail biting situation until I checked my bank account this morning,” the 3D-printed seller from Central Ohio said, adding that Etsy is currently his only source of income.
Etsy merchant Elizabeth Thompson, 57, said she has received little guidance from the company on what transpired.
“I just don’t understand why they can’t be a little more transparent about what’s going on. It’s not like it’s their fault,” she added.
Etsy said it communicated with any seller who was impacted on Friday directly via email and posted an update in their forums on Saturday.
Questions & Answers
Q.Which other major e-commerce platform was affected by the Silicon Valley Bank collapse?
Which other major e-commerce platform was affected by the Silicon Valley Bank collapse?
Shopify, which provides websites and apps to stores, also halted payments to online sellers who had accounts with Silicon Valley Bank. They advised merchants to switch accounts to receive their funds.
Q.How many Etsy sellers were impacted by the payment delays due to the bank's collapse?
How many Etsy sellers were impacted by the payment delays due to the bank's collapse?
Approximately 0.5% of Etsy's active sellers, which amounts to about 2,700 merchants, had their payments delayed last Friday. Etsy has started processing these payments via another partner.
Q.Did Etsy communicate with the affected sellers about the payment issues?
Did Etsy communicate with the affected sellers about the payment issues?
Etsy stated it communicated directly via email with any seller who was impacted on Friday. The company also posted an update regarding the situation in its forums on Saturday.
Q.Are Etsy's and Shopify's online merchants primarily large corporations or smaller businesses?
Are Etsy's and Shopify's online merchants primarily large corporations or smaller businesses?
Etsy works with 5.4 million merchants and Shopify works with 1.75 million, and the article states that the vast majority of these online merchants are small-to-medium size businesses worldwide.
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