Etsy Resumes Payments After SVB Debacle
Etsy began processing seller payments on Monday via its other payments partners, following the implosion of Silicon Valley Bank (SVB).
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On Friday, Etsy had to delay payouts when regulators took over SVB and froze accounts mid-afternoon. Over the weekend, there was a lot of confusion on how the government intervention of SVB would play out for depositors that held more than $250,000 in funds.
The FDIC normally insures only up to $250,000 per deposit account, but late Sunday, the Biden administration decided to back all deposits from FDIC resources, along with at least one other bank in New York.
This meant account holders in SVB bank would have access to their funds today. But as of last night, it was unclear how this would affect Etsy because Etsy’s seemed to suggest its payout delay may have been related to a payment partner.
A spokesperson for Etsy confirmed today that the payout delay impacted only a small group of its total seller base, accounting for about 0.5%.
Furthermore, Etsy started processing payments this morning to sellers who had their payouts delayed through one of its other payment partners.
“At Etsy, supporting our sellers is our highest priority, and we understand how important it is for these small businesses to be able to receive their funds when they need them,” the spokesperson said.
“We recently experienced a delay in issuing payments to some sellers related to the unexpected collapse of Silicon Valley Bank.
“Our teams have been working around the clock to implement a solution. We expect to pay sellers via our other payment partners and are starting to process these payments as soon as March 13.”
We have also seen messages on social media forums from sellers stating that they received their scheduled Monday payments today. But others claim their once-a-week scheduled Monday payments today were delayed to next week on Monday.
Of the messages we saw from sellers affected by the delay on Friday, some said the payment date was moved from March 13 (today) to March 14.
So, it seems there is some progress on this front, but it is still a bit inconsistent while Etsy is working on resolving this situation.
We reiterate what we said when we broke the story originally on Friday, Etsy is in good financial shape. At the end of 2022, they had $921M in cash and cash equivalents and a $200M credit line they didn’t use.
Large companies of this size do not hold their money in only one bank, and that is assuming they even had money in SVB.
Etsy did not issue an SEC Form 8-K which would typically be used to disclose material changes to their business operations. Other public companies like Roku acknowledged in a Friday evening filing they had 26% of cash and cash equivalents in SVB.
While payouts may still be delayed for a few days as Etsy catches up on the situation, there really is no reason for sellers to panic about this situation.
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Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.