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EBay Inc. will drop American Express<\/a> Co. cards as a payment option because of \u201cunacceptably high fees,\u201d according to a statement from the online marketplace.<\/p>\n EBay on Wednesday notified customers about the change, which is set to take effect Aug. 17.<\/p>\n \u201cAfter careful consideration, eBay<\/a> has decided to no longer accept American Express globally effective August 17 due to the unacceptably high fees American Express charges for processing credit card transactions,\u201d the company said in a statement<\/a>.<\/p>\n The two firms have been embroiled in negotiations around the merchant discount rates \u2014 also known as interchange fees \u2014 charged by Amex at the point of sale. The fees, imposed each time a card is used in a transaction, have long been a headache for merchants. One trade group said retailers paid more than $172 billion<\/a> in card-processing fees last year.<\/p>\n Amex, however, said its research shows that its fees are comparable to what eBay must pay to accept similar cards on other networks, such as Visa<\/a> Inc. and Mastercard<\/a> Inc., while providing more value.<\/p>\n \u201cAmerican Express card members have an average transaction size at eBay that is more than double the transaction size of cards from other networks,\u201d New York-based Amex said in a statement. \u201cWe find eBay\u2019s decision to drop American Express as a payment choice for consumers to be inconsistent with their stated desire to increase competition at the point of sale.\u201d<\/p>\n Competitors of eBay \u2014 including Amazon<\/a>.com Inc. \u2014 have made similar moves while bargaining over transaction fees. Amazon threatened<\/a> to stop accepting all Visa cards on its global network before finally striking a deal<\/a>. Amex has also lost deals<\/a>, including its once-exclusive pact with Costco<\/a> Wholesale Corp., over its terms.<\/p>\n \u201cUltimately, we agree with AXP\u2019s stance as the company prices to value, and it would be a slippery slope downwards if AXP sacrificed on price,\u201d Keefe, Bruyette & Woods Inc. analysts Sanjay Sakhrani, Steven Kwok and Vasundhara Govil said in a note, referring to the company by its stock ticker. \u201cRecall this was a big reason for AXP backing out of the Costco relationship in the past.\u201d<\/p>\n Amex said eBay represents less than 0.2% of its total network volume.<\/p>\n EBay has lost significant market share to other e-commerce giants such as Amazon and Walmart<\/a> Inc. in recent years, and last month provided a weaker-than-expected earnings outlook<\/a> for the current quarter. Globally, shoppers will spend $73.4 billion on the marketplace this year, according to average analyst estimates compiled by Bloomberg.<\/p>\n<\/div>\n\nSubscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up<\/a> for free.<\/div>\n<\/div>\n