{Business Tips} Etsy Introduces Direct Checkout

On February 7th, Etsy announced that they will be rolling out a new Direct Checkout feature over the next few months.  At present, Etsy shop owners have been able to accept major credit cards payments for shop orders only through the use of PayPal.

If you noticed the announcement in your shop and watched the video, you probably already know what I’m talking about. If not, give the video below a gander.

Direct Checkout, will give shop owners the ability to accept Visa, MasterCard, American Express, or Discover card right through their shops, bypassing the whole PayPal ordeal. Etsy also announced that PayPal is sticking around and there are no plans to discontinue its use. Whew!

When direct checkout becomes available, shop owners can choose it as an accepted payment method in the shop dashboard under Shipping & Payments.  This will come as a nice option for PayPal-averse customers. There will be fees associated with this payment acceptance method.

Direct checkout payment option

Direct Checkout under Shipping & Payments

Here is an excerpt of the information Etsy shared on their blog about the Direct Checkout fees:

If you sign up for direct checkout, you’ll use our new Shop Payment Account area to manage the money you make. This new area allows you to control deposits into your bank account after you ship your items, and issue full or partial refunds directly to your buyers. Direct checkout will cost a 3% + $0.25 USD payment processing fee per sale. This fee will be automatically subtracted at the time of sale and will be reflected in your Shop Payment Account. If you issue a refund to a buyer, this fee, as well as your transaction fee, will be credited back to you proportionately.

The Direct Checkout fees are in addition to existing transaction and listing fees – these don’t go away. But, you only pay Direct Checkout fees, if you have chosen it as an accepted payment method and a buyer uses it to pay for a purchase – just like Paypal.

So let’s compare Direct Checkout to PayPal:

 Etsy Direct Checkout Fees:                                                   PayPal Fees:

3% + $0.25 USD                                            |                       2.9% + $0.30

On a $10 purchase paid with PayPal, the fees are $0.29 + $0.30 for a total of $0.59.That same purchase paid with Etsy Direct checkout, fees would be $0.30 + $0.25 for a total of $0.55. That’s a $0.04 difference, which may not seem like a huge difference but can add up to some savings at the end of the year – just do the math.

However, the question of “How and When do I get my money?” is a whole different story. Based on the information I’ve read on the Direct Checkout FAQ, there will be a payment delay of 3 days – which means you’re funds will not be available for deposit to your bank account right away. If a customer files a dispute with Etsy, that delay can be longer than 3 days. You can read the Direct Checkout Terms of Use here.

All of a sudden I’m having deja vu, remembering when all my funds were tied up over a customer dispute in PayPal’s earlier days – oh, the pain and frustration…  It took PayPal some time to get things figured out, payment processing is no joke.  Although I have a love-hate relationship with PayPal, I have to say that I like having anytime access to my money and having a Paypal debit card which is separate from my personal funds to pay for materials.

All joking aside (although I wasn’t joking), I predict that Etsy Direct Checkout will go through its fair share of growing pains initially because there are two things people don’t like – other people messing with their money and their emotions. At this time, Etsy has a chosen few early adopters to try out the Direct Checkout feature, I’m looking forward to any feedback they have.  For now I say keep you eyes on Etsy forums because as with all new features once it is rolled out to the masses I’m sure we will hear some juice gossip, complaints and whining from shop owners.

In the meantime, I suggest you all head over to the Direct Checkout FAQ and educate yourselves before jumping in with both feet.


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About Myra @ HerbanLuxe

Myra is an Etsian with an MBA. The art of business and technology are her two obsessions. She has been writing EcoEtsy Business Tips since 2010. Myra grew up in Puerto Rico with grandparents who were a head of their time and didn't know it - living what we would call today, "a simple green life." Her love of learning and teaching are the key drivers in almost everything she does.


  1. Thanks for the awesome article Myra! Your posts are always so fresh and engaging!! If it weren’t for you guys here at EcoEtsy, I don’t think I would ever be able to keep up with Etsy changes (among other things:).


  2. Thank you Myra. I think it is nice to have this option. I have not read the details yet and wondering in that case do my customers have to be etsians or subsbcribe etsy, like they now have to be, even if they do not have a store? I mean just to be a buyer you still have to go through enrolling yourself in etsy and have a status, right now. Is it going to change. I know many customers shy away because they have to go through this before they can buy any thing. Well, we’ll see. Dita


    • Hi Dita;

      Direct Checkout will not change the fact that buyers still have to register to shop Etsy. Actually, I think that having buyers enroll on Etsy provides a level of protection for us a sellers and there is no mention of this changing.