Etsy and its peers like Shopify have had to put their re-strategy agenda into motion.
Retail merchants who sell on various online marketplaces, including the American e-commerce marketplace Etsy Inc (NASDAQ: ETSY) are reportedly seeing their payments late due to their reliance on the distressed Silicon Valley Bank (SVB). As a 24-hour marketplace, revenue from sales by Etsy and other companies, including Shopify Inc (NYSE:SHOP), has lagged significantly.
The fallout from the impact of the Silicon Valley Bank collapse is becoming more apparent, and many retail marketplaces have had to ask their merchants to submit other payment information to process their payments quickly. According to Etsy, only about 0.5% of active merchants registered on their platform are affected by the forced stop on SVB.
This 0.5% of employees account for a total of 2,700 merchants who are going through difficulty. The company has already confirmed that it is taking proactive steps to begin disbursing funds to affected merchants.
“We are working to pay these sellers today and already began processing payments through another payment partner this morning,” an Etsy spokesperson said.
Pursuant to the assurances provided by the joint statement issued by the US Department of Treasury, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC), all depositor funds will be paid out as soon as the operations on Monday. According to Etsy, the payment you are processing has no connection to the one coming from the government.
The pressures on the US banking sector have been great, and traders seem to be bearing the brunt. According to the Economic Times, Moshe Steinberg, a 3D printer whose only earnings come from Etsy, said he received payment from the marketplace but has not yet settled through his bank.
Beyond Etsy, retailers renew their strategies
Staying afloat as a multinational company seems to be simple when things are running optimally, however, with things not in the banking system, Etsy and its peers like Shopify have had to put their re-strategy agenda into motion.
According to Shopify CEO Tobi Lutke, the SVB collapse had relatively little impact on the company.
“We use SVB as one of 12 or so banks spread mainly across Canada and the US,” said Lutke, adding that “a small part of our typical US operating cash flows.”
To minimize book clutter, Shopify has also stopped processing SVB-billed merchant payments. As the firm detailed on its website, new account details must be provided to receive payments, and these accounts must not have any affiliation with SVB.
In addition to Etsy and Shopify, other key payment processors such as Jack Dorsey’s Block Inc (NYSE: SQ) have had to implement similar strategies to avoid strain on operations.
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Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about the real-life applications of blockchain technology and innovations to drive mainstream acceptance and global integration of emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain-based sites and media. Benjamin Godfrey is a lover of sports and agriculture.
