Etsy resumed payments to merchants with bank accounts in Silicon Valley on Monday after the e-commerce platform suspended their payments over the weekend following the U.S. government’s shutdown of the bank last week.
About 0.5% of Etsy’s active sellers — or about 2,700 merchants — saw their payments delayed Friday due to the collapse of SVB, according to Etsy.
“We are working to pay these sellers today, and we have already started processing payments through another payment partner this morning,” an Etsy spokesperson told Reuters on Monday.
The payments Etsy sellers received are unrelated to Sunday’s announcement from the Federal Reserve, which guaranteed SVB customers would have access to their funds on Monday.
Shopify, 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 website. of the company.
Etsy and Shopify work with 5.4 million and 1.75 million online merchants worldwide, respectively, mostly small and medium-sized businesses.
Some Etsy sellers have decided to put their stores on vacation mode, suspending customer purchases in a bid to minimize financial loss while others say they received their payments on time.
Moshe Steinberg, 31, said he received payment from Etsy on Monday morning, but is still waiting for it to be cleared by his bank.
“It was a tough situation until I checked my bank account this morning,” said the central Ohio 3D printing salesman, adding that Etsy is currently his sole source of income.
Etsy merchant Elizabeth Thompson, 57, said she received little advice from the company about what happened.
“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 contacted any sellers who were affected Friday directly via email and posted an update to its forums Saturday.
e-commerce response
Shopify chief executive Tobi Lutke said in a tweet on Saturday that the company is seeing “very minor impact” from SVB’s collapse.
“We use SVB as one of about 12 banks spread primarily across Canada and the United States,” Lutke said, adding “a small portion of our US operating cash flow is tied to SVB, but we’re working around that. and it should be business as usual.”
Shopify has temporarily suspended payments to its merchants who receive payments to SVB accounts. These online sellers need to update their bank accounts that are unrelated to SVB to start receiving payments again.
Shopify Capital, a branch of Shopify that provides loans and cash advances to its merchants, has been impacted by the shutdown of SVB, according to the company’s website. Merchants are not able to view their loan offers or view their loan repayments at this time.
“Shopify expects to resume all Shopify Capital operations in the United States in the coming days,” the company said on its website.
Shopify is also opening interest-free balance accounts for merchants with funds equal to the payroll amount so merchants can pay their employees, according to a Shopify spokesperson.
Block Inc’s Square, which processes credit card payments for online and physical businesses, began suspending payments to their merchants’ SVB accounts on Friday and asking them to update their banking information, according to a person close to them. folder.
Changing bank accounts can be a problem for sellers whose only business account was with SVB. Payment suspensions have forced thousands of market vendors and mom-and-pop shops to scramble to switch bank accounts and rush to access funds for new product inventory.
By Doyinsola Oladipo and Arriana McLymore; Publisher: Aurora Ellis
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