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Starting this month, Etsy will require all US sellers to self-verify their bank accounts. This new policy is to ensure compliance with money-laundering regulations and an effort to combat fraud and increase transparency among sellers. You must complete the verification within 30 days, or your shop will be suspended until you verify.

Etsy also allows businesses to use a third party to verify their bank accounts. Although some sellers are hesitant to give the fintech company access to their banking information, Etsy advises them to utilize Plaid. Before the implementation of Plaid for US sellers, the ownership of the bank account was not confirmed when a US seller updated their bank information.

Plaid was accused of exploiting consumer data without consent and settled for $58M in 2021. In their case, the plaintiffs claimed that Plaid “exploited its position as a middleman” to stealthfully gather financial information and market transaction histories.

In a Reuters interview, seller Dorothy Domingo was quoted “This is so typical of Etsy on any controversial subject but, when it has to do with our finances, it’s unacceptable,” Domingo has been selling functional pottery on Etsy since 2008. Some merchants also told Reuters that Etsy’s self-verification process is “tedious.”

This is the most recent problem that some sellers have encountered. Earlier this year, a few people went on strike in opposition to an increase in the Etsy transaction price from 5% to 6.5%. 

The business defended the action, stating that it would use the extra income to initiate more features for retailers.

If you are not a US-based seller, don’t worry – this recent change will not impact you.

Photo by Kelly Sikkema on Unsplash