Etsy imposes that US sellers must verify bank accounts

Monday 29 August 2022 15:00 CET | News

US-based marketplace Etsy made an announcement according to which sellers on its marketplace will either need to self-verify their bank accounts or do it through a third-party.


The marketplace thus seeks to comply with anti-money laundering and related regulations. Reuters talked to several sellers who, along with many others cited from online discussion forums, were displeased with Etsy’s decision, saying the recommended mode of verification involved providing financial technology platform Plaid with their banking username and password.

Plaid, the payments enabler working with Etsy, which last year agreed to pay USD 58 million to settle a case that alleged it used financial information without consent, said it was ‘committed to providing a secure experience` to users, Reuters explains. Etsy has also provided the option to self verify bank accounts, but a seller who did not wish to be named said the process was tedious.

Not the first time Etsy makes controversial policy changes

This is the latest in a series of issues faced by some sellers. A few went on strike earlier this year to protest an increase in transaction fee at Etsy. In May 2022,  the company said less than 1% of sellers went into ‘vacation mode,’ which puts their shops on hold, in mid-April, asking for a cancellation of the increase and an option to opt out of Etsy's offsite ads programme. 

According to Reuters Etsy is still a key source of income for its nearly 8 million active sellers, but some said they were considering exiting the platform.


Etsy imposes that US sellers must verify bank accounts


Gig economy in the US, a forced to be reckoned with

According to Credit Summit, 70.4 million Americans performed freelance work in 2021, representing 36%—or more than one-third—of the entire US workforce. The number of workers who are non-temporary freelancers rose from 33.8% to 35.0% between 2020 to 2021.

Forbes suggests that freelancing is an upwards trend especially among the most educated. The higher skilled nature of freelancing is clear in 51% of post-grad workers doing freelancing, up 6% since 2020. The share of high school graduates or less freelancing declined from 37% in 2020 to 31% in 2021.

Moreover, Statista estimates that in 2027, 86.5 million people will be freelancing in the US and will make up 50.9 percent of the total workforce.

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Keywords: gig economy, payment processing, digital payments, online payments
Categories: Payments & Commerce
Companies: Etsy
Countries: United States
This article is part of category

Payments & Commerce


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