Etsy and Plaid
Etsy's new financial solution jeopardizes my store.
10-04-22
Although I have taken a break from selling on my store, I still check Etsy occasionally for customer messages and inquiries. Last week I received a message from the Etsy Support bot informing me of the following:
“Hi there,
We recently reached out to let you know that you need to verify your bank account to continue receiving funds from Etsy. It looks like you haven’t done this yet. We’ve extended the deadline to give you more time to verify your information. However, if you don’t verify by October 5, you’ll no longer be able to receive funds from Etsy.
In order to keep our community safe, reduce the risk of fraud, account takeover, and to meet evolving legal requirements, we’re requiring all US sellers to verify their bank account - even if you’ve been using this bank account to receive funds for a while.”
Upon visiting the Payment settings page, I was greeted with this urgent message threatening shop suspension in the event of noncompliance:
Suddenly my linked bank account needs to be updated, but not through Etsy themselves; instead, Etsy has offloaded bank verification services to third-party Plaid. According to Etsy’s support article, this change seeks to “protect [Etsy] users, reduce the risk of fraud, prevent account takeover, and meet evolving legal requirements,” explaining that under the old system, bank account ownership was not verified after updating. I can only speculate here, but I believe Etsy’s goal of matching new legal standards plays an equal or majority role in this shift. Account hijackings should be prevented via hardened account security, but I digress.
I’m very reluctant to link my bank account to Plaid. Plaid’s instant verification option collects bank account username and password (!) whereas manual verification submits two small charges to confirm. Either way I’d be giving my banking details to a third-party with a historical disregard for user data. In return, I regain my ability to deposit my Etsy income to my bank, a freedom I had without a Plaid account that has now been stripped.
If Etsy’s transition to Plaid remains permanent and lacks alternative verification methods, my hiatus from Etsy may extend indefinitely. That’s if my store isn’t suspended when the clock strikes twelve in under an hour. If this really is the end of my Etsy store, I’m proud of myself for turning a few of my interests, hobbies and skills into a profitable and popular side business. I am very grateful for each and every customer that purchased a keyboard; the positive feedback and genuine satisfaction with my product kept me motivated. Regardless of the outcome, ergoboards was quite the ride, and I’ll always be thankful for the experience.
-medwa
10-09-22 update
After checking back, I found that my store was not immediately suspended. To the credit of Etsy, the 30-day extension is fair, but I am still not going to verify my bank with Plaid. The countdown begins…
11-13-22 update
(Original message from 11-04-22)
Hi there,
We recently reached out and asked you to verify your bank account to continue receiving funds from Etsy. We know the holiday season can be a busy and important time for your business, so we’ve extended the deadline to give you more time to verify your information.
In August, we announced that we’re requiring all sellers in the United States to verify their bank details to keep our community safe, reduce the risk of fraud, and help Etsy meet evolving legal requirements.
We recommend that you verify your info as soon as you can, but you now have until January. You can see how many days you have left to verify your details by heading over to your Shop Manager.
In January, we’ll start pausing deposits for shops that have not verified their bank details. If you don’t verify your bank account by the deadline in your Shop Manager, you’ll no longer be able to receive funds from Etsy.
If you have a few minutes today, you can verify your info now and take this off your to-do list for the new year. Here’s how to verify your info:
- On Etsy.com, click “Shop Manager”
- Click “Finances”
- Click “Payment settings”
- Then follow the instructions in the yellow banner
If you need help or have any other questions, check out this article (help.etsy.com/hc/articles/115015775908) or live chat with Etsy Support 24/7 from our Help Center (help.etsy.com/hc/requests/new).
Thanks for being part of our community.
Etsy
P.S. This inbox is unmonitored so replies to this Message may not be seen. Messages from Etsy staff do not count toward your Star Seller eligibility, so not responding to this Message will not impact your Star Seller message response rate.
They’re really dragging this out. Perhaps they may change their Plaid-only verification process by the end fo the year, but that’s just my optimistic speculation.