Etsy’s full-scale home-based payment system! Forced ban on African sellers from using independent PayPal accounts

On 26 August, Etsy, the electrician platform, announced a major policy adjustment requiring all vendors, including African vendors, to stop using the independent PayPal account and move to the Etsy Payments payment system. This initiative aims to reduce the risk of fraud and to harmonize transaction experiences. However, owing to the limited coverage of Etsy Payments in Africa, some 54,000 African vendors are at risk of closing their shops.

Etsy stated that this change would enhance security, simplify dispute resolution and provide a seamless settlement experience for buyers, supporting a variety of payment modalities, such as credit/debit cards, Apple Pay, Google Pay and PayPal (in available areas). Through the Unified Payment System, Etsy is better placed to manage fraud, refunds and buyer disputes and to reduce the complexities and risks associated with independent PayPal accounts.

Etsy Payments is currently available in only two countries in Africa, namely South Africa and Morocco. These sellers, who had previously relied on independent PayPal accounts, now face two options: to relocate their shops to countries that support Etsy Payments or to close them directly. As the deadline for implementation of the policy was approaching (5 August 2025), the seller had less than five months to find alternative solutions, which was extremely urgent.

According to statistics, Etsy expects total sales of Platform goods (GMS) to reach $10.9 billion in 2024, 99 per cent of which will be completed through Etsy Payments. This policy adjustment is expected to result in a sales loss of $109 million and a reduction of 300,000 transactions per month.

For African entrepreneurs, Etsy has been an important platform for reaching global markets, enabling them to sell handicrafts, retrofitting goods and unique products to millions of buyers globally. Etsy has 5.4 million active sellers and 30 to 34 million transactions per month, providing a valuable opportunity for creators in the African region who lack the infrastructure of local electric operators. However, the non-availability of Etsy Payments threatens this source of livelihood.

Some 54,000 households were affected, and African sellers accounted for a significant proportion of them, many of whom viewed Etsy as a major source of income. African sellers are in a critical situation, facing not only the closure of their shops, but also the loss of their economic capacity to support their families, repay loans and support their elderly. These vendors processed an average of between three and six orders per month, contributing $109 million in total sales expected to be lost by Etsy. While this revenue represents a small share of the total sales of Etsy $10.9 billion, it is of critical importance to individual craftsmen.

In addition, the policy may push African sellers towards less regulated platforms or underground markets, increasing fraud and security risks. Industry experts warned that it might be counterproductive to weaken Etsy ‘ s original intent to reduce fraud, as buyers and sellers might turn to unregulated alternative platforms and risk fraud and unreliable logistics.

Etsy argued that the mandatory use of Etsy Payments was necessary to enhance the integrity of the platform and the user experience. Through the Unified Payment System, Etsy can manage fraud, refunds and disputes more effectively and ensure that buyers and sellers have a consistent experience. Data show that 99 per cent of the GMS have been processed through Etsy Payments, indicating that the system has been widely used in core markets such as North America and Western Europe. In the area supporting PayPal, Etsy Payments integrated PayPal functions without the need for vendors to manage separate accounts, thereby reducing costs and administrative burdens.

Despite the challenges posed by Etsy ‘ s policy adjustments, they also created opportunities for African entrepreneurs and local platforms. The closure of the Etsy shop could contribute to the development of the regional electrician ecology and create a platform better suited to the needs of African vendors. For example, the Ajé platform in Nigeria has consolidated local payment providers and focused on reliable logistics, which is expected to fill the gap left by Etsy. Financial technology solutions such as Grey, which allow South African sellers to receive Etsy payments in multiple currencies, provide examples of cross-border transactions.