After ending a 15-year-long partnership with Paypal, eBay has finally adopted a new payment system. So, we no longer require Paypal to process our customer’s payments on eBay.

Now, sellers must use eBay-managed payments to process payments on the platforms. However, this move hasn’t affected eBay’s profitability, as many sellers continue to succeed on the platform, including Michael, who has found great success in eBay dropshipping.

Therefore, in this article, we will analyze eBay’s new payment processor in-depth. Below, we will also cover various factors such as its pros, cons, fees, and steps to set it up.

What Is eBay’s Payment Processor? 

In essence, eBay Managed Payments is eBay’s in-house payment processing system for buyers and sellers. It is designed to optimize the selling experience on eBay by allowing us to sell and get paid on the same platform.

So, how did it all work before? Prior to eBay-managed payments, sellers had to integrate their Paypal accounts with their eBay accounts. As such, all transactions between the buyer and seller went through Paypal. Similarly, sellers also had to pay eBay selling fees and Paypal fees separately every month.

However, eBay has now cut ties with PayPal and started working with Payoneer. With eBay managed payments, our money will be deposited directly into our bank account if we are US sellers. If we are international sellers, all our payments will be processed through Payoneer.  

Similar to PayPal, Payoneer is also a digital payment platform. While Payoneer is only compulsory for international sellers, US sellers can also manage everything through Payoneer. Since it offers ease of transactions, Payoneer is a great payment processor. 

How Does eBay’s Payment Processor Affect Dropshipping? 

Before moving further, let’s understand how eBay’s Payment Processor affects dropshippers. Previously, dropshippers had to manage their eBay and PayPal accounts separately. However, everything related to payment, such as eBay commission, subscription fees, and PayPal fees, went through PayPal.

Even with the new payment processor, withdrawals to bank accounts are still made through Payoneer. So, what are some benefits of using Payoneer? Let’s see:

  • Lower fees than PayPal
  • Instant payment
  • Customize payout schedules
  • Additional transparency

Comparatively, Payoneer offers lower fees than PayPal. While we may see the transactions through eBay, we can only view our account balances and process withdrawals through Payoneer.

Before the new payment method, sellers instantly received money from the transaction minus the PayPal fees in their PayPal account. For instance, if buyers purchased products worth  $100, sellers received $90 instantly, and $10 would be charged as a PayPal fee.

For dropshippers, the benefit is now we can get instant payment. Also, with Payoneer, we only have to wait 1-2 days for payouts from eBay. Although there is a payout delay in weekends, the only thing charged at the end of the month is the store subscription fee from eBay, which is a fixed fee.

Additionally, we can customize payout schedules such as daily, weekly, and biweekly. As such, we can use this to our advantage for instances like refunds. For refunds, we can set payouts to weekly instead of daily to ensure we have enough funds to refund our customers.

Regardless of the schedule, there will be a few days of payout delay. Nevertheless, eBay-managed payment allows more transparency in transaction fees.

The Advantages & Disadvantages Of The eBay Payment Processor

So, how is this new payment processor different from the old one? And, is it any better? To find out, let’s look at some of the advantages and disadvantages of the eBay payment processor:


  • Full transparency 
  • Fees deducted at the beginning of the month 
  • Lower fees with Payoneer 
  • Link multiple bank accounts with Payoneer 
  • Better seller protection

With eBay managed payments, we have full transparency. As such, we can see all the fees that are charged to our accounts, such as product category and final value fees. On top of that, the sales tax is taken immediately, and the fees are based on the profit after the tax. Thus, enabling us complete transparency over our income and expenses.

Moreover, with Payoneer, all fees are deducted at the beginning of the month. Previously, it happened at the end of the month with Paypal.

Plus, compared to PayPal, Payoneer has lower fees, resulting in higher profits for eBay sellers. Furthermore, Payoneer allows us to have multiple virtual USD bank accounts and many supported currencies.

Also, we have enhanced seller protection on eBay. Now, buyers cannot claim for a dispute on Payoneer after losing a case against sellers on eBay. Previously, buyers had an unfair option to open cases on PayPal to get their money back.


  • Required use
  • Payout delay

On the downside, we do not have any other option except eBay managed payments. So, if we want to take advantage of eBay’s massive number of users, working with the new payment processor is mandatory. Furthermore, while we can customize our payout frequency (daily, bi-weekly, and monthly), we may have to wait several days to receive money in our accounts.

Sometimes, a daily payout can take longer than one day, especially on weekends. Although there is a payout delay, we don’t have to worry about account suspension due to additional fees at the end of the month.

Understanding The eBay Payment Processor Dashboard

Now that we know the pros and cons, let’s find out how the eBay managed payment processor dashboard looks. To navigate to the dashboard, go to ‘My eBay’ on the top right of the page. Then, choose ‘Selling’ and click on ‘Payments.’ From this page, we can see the following:

Financial Summary

The financial summary will give us a monthly detail of our finances, including selling activity and transactions. Plus, it also displays information on refunds, claims, payment disputes, payouts, and more.

Available/Processing Funds

In essence, this section displays an overview of our payout information.  As such, we can view details such as Available, On hold, and Processing funds along with recent transactions and payout settings.

To clarify, available funds are the amount eBay will pay us in the next scheduled payout. Processing funds are the amount the buyer has paid, but the payment is still processing. And on-hold funds are those funds that are restricted because of issues such as dispute claims. 

Recent Activity

With this tab, we can see the latest activity on our account. So, information about sales, payouts, and shipping labels from the past few days is visible in this section.

Payout Preferences

Here, we can change our payout settings. For instance, we can change the frequency of payout by scheduling the payout in different schedules, such as daily, weekly, bi-weekly, or monthly.

Payment Reports and Taxes

Finally, we can view or download our transaction report, payout report, tax invoice, and financial statement from the Reports section.

Overall, the new dashboard is simple and easy to understand. With that in mind, we can smoothly navigate the dashboard and view detailed information about our accounts. 

How The eBay Managed Payments Processor Works

While eBay has upgraded its payment processing system, it is easy to work with. If we are US sellers, we need to link our checking account (bank account) to our eBay account. Next, the eBay managed payment system processes our customer’s payments and deducts the payment processing fee and commission from the sale. Then, eBay sends the funds to our bank account within two business days, and the bank debits our account in another few days.

On the other hand, eBay partnered with Payoneer to cater to international sellers (outside the US). As such, eBay directly sends our payments to our Payoneer account. Like PayPal, Payoneer is a financial services company that provides domestic and international money transfers and digital payments. However, Payoneer fees are relatively lower and more transparent.

With eBay managed payments, all our funds, like our eBay store subscription, sales, and refund amount, are managed through Payoneer. Generally, refunds are deducted from our Payout balance. And, if we don’t have sufficient funds to send the refund, eBay will charge our secondary payment methods, such as credit cards. But, it is easier if we manage it all from the Payoneer platform.

Although PayPal is not used anymore for payment processing, customers can still checkout on eBay using PayPal. Furthermore, there are various other payment options for buyers, such as credit cards, Apple Pay, and more. All in all, managing all our funds in one place through Payoneer enables us to have a smooth payment process with all our fees and payments in one place.

eBay Managed Payments: The New eBay Payment Processor Fees

Now, let’s look at the change in fee structure. Before the introduction of eBay managed payments, dropshippers had to pay a commission (2.9%) to eBay and a separate transaction fee ($0.30) to PayPal. But now, we only have to pay eBay. With that in mind, let’s look at the new eBay payment processor fees:

Below, we will look at them in detail.

Category Fee

To elaborate, category fees is the cost we pay if we sell from a specific category, such as jewelry, watches, fashion, beauty, and more. Generally, it is free for most categories and allows us 250 listings per month. After 250 listings, eBay charges $0.35 per listing.

For the clothing, shoes, and accessories category, the category fee is free on all products over $100. Then, products like food trucks, trailers, and heavy equipment from business and industrial categories have a $20 category fee. On the other hand, products such as guitars and basses from the musical instrument category are entirely free.

International Fee

Another fee that eBay charges international sellers (outside the US) is International fees. In short, these fees differ according to various regions. For instance, eBay charges 1.30% to European sellers and 1.45% to South Korean sellers. Additionally, international fees are only taken from our profit after tax.

Insertion fee

Now, let’s explore what eBay insertion fees are. The insertion fee is the cost of listing an item on eBay. For individual sellers, listing items is free up to a certain limit (1000 items). Additionally, eBay charges $0.25 per product after 1000 listings.

Besides that, business sellers also get free listings according to their shop subscription type.

Final Value Fee

The final value fee refers to the percentage(%) of the selling price eBay charges us when an item is sold. In a nutshell, final value fees can vary according to the account type, but they are usually around 5-15% of the total amount, including shipping.

Promotional Fee

While eBay primarily charges these four fees, we have to pay a promotional fee if we use eBay’s promoted listing features like Promoted Listings Standard & eBay PPC. In short, eBay promoted listings feature allows us to make our products more visible across the eBay platform. Therefore, if the sale happens from this promotion, we’ll see it in a separate transaction under the payments section.

All in all, there are various fees we need to factor in before we start selling on eBay. However, we can use AutoDS’ eBay fees calculator to calculate these complex fees quickly. With this calculator, we can save the time required to calculate our profits.

How To Set Up eBay Managed Payments

With the new payment processor, we can quickly start or continue our dropshipping business on eBay. Therefore, here are some general steps to set up eBay managed payments:

  1. Register To Payoneer & Select Online Seller Account
  2. Link Payoneer Account To eBay Seller Account
  3. Profile Verification On eBay
  4. Link Credit Or Debit Card To Bank Account
  5. Submit Request

Let’s learn more about how to perform these steps.

1. Register To Payoneer & Select Online Seller Account

To begin, we must create an account on Payoneer. Head over to and click on Get Started. Next, select ‘Online seller’ from the account types.

Then, Payoneer will direct us to a 4-stage registration process. Here, we need to fill in personal information and country of residency. Also, we should fill in security information like passwords. Finally, we need to link to our bank account to complete the process.

After registration, we need to link the Payoneer Account with eBay. In fact, eBay sent an email to existing sellers with a link to switch to eBay managed payments, where we can connect our Payoneer account.

Alternatively, we can set it up manually on Payoneer. First, log in to your Payoneer account and click on the Activity Tab. Then select Store Manager, and link to the eBay store.

3. Profile Verification On eBay

When we manually add our eBay store link, eBay asks us to complete verification by filling in our details, such as name, address, date of birth, and ID. Afterward, our profile will go through a verification process.

In step 4, we can link our credit or debit card to our bank account. In case we have insufficient funds on Payoneer for issues such as returns, we need an alternative payment method. While this is not compulsory, it gives us a strong backup.

5. Submit Request

Finally, submit the request, and Payoneer will send us an email asking for a few verification checks. From the email, click on Go to the verification center and submit the requested documents.

How easy was that? By following these five simple steps, anyone can set up an eBay managed payments system with Payoneer. Furthermore, we can also add multiple eBay accounts to a single Payoneer account. With multiple integrations, we can manage all payouts from our Payoneer account, allowing us to be organized.

Frequently Asked Questions

How Are Payments Processed On eBay?

All payments are now processed on eBay with eBay managed payments. This payment processing system allows sellers to sell products and get paid on the same platform.  

Can I Still Use PayPal As My Payment Processor On eBay? 

Unfortunately, we can no longer use PayPal as our payment processor. However, Payoneer is a better alternative as they have comparatively lower and transparent fees. 

How Do eBay Managed Payments Work & Is It Mandatory? 

If we want to dropship on eBay, the eBay Managed Payments system is mandatory. If we are US dropshippers, we receive our payout in our eBay-linked checking account. For international sellers, eBay has partnered with Payoneer to process our customer’s payments. 

Are There Additional Fees With The New eBay Payment Processor?

After the switch, eBay changed the old fee structure, which required us to pay eBay and Paypal separately. Currently, we have to pay eBay fees (category, insertion, final value fee, etc.) and Payoneer fees. However, the fees to Payoneer are significantly lower than before. 


Wow! Give yourself a pat on the back. Now, we have extensive knowledge of how eBay’s managed payments works. Plus, we can also set up the new payment processor in minutes. As such, we definitely have the upper hand over our competitors.

However, if we want to build our expertise on eBay, there are other subjects to learn besides the payment processor system. With that being said, here are some articles that will help us understand eBay dropshipping completely: