What is depop payments ?
Depop is a marketplace that is growing very fast since it was founded. Its growth shows now signs of slowing and has been accelerated even more since its aquisition by the marketplace etsy. Any growing business will come with big changes, for depop this change is being made in how it handles its transactions with the introduction of depop payments.
How does depop payments work ?
Depop started out using paypal to process virtually all transactions, so every sale you made would be sent instantly into your paypal account. Depop has now made a move to their own payment processing sytem powered by Stripe Connect. Your sales will now be deposited in your bank account rather than you having to go through paypal.
This move means that depop and their users (buyers/sellers) have a lot more flexibility in how payments work. The introduction of depop payments is not surprising as a large marketplace cannot rely on an external payment service like paypal forever, many popular marketplaces handle their own payment processing or are at least more involved in the process. We’ve even seen eBay make a move to do something similar with eBay managed payments for very similar reasons.
Pros of depop payments
- Simpler to understand fees: A benefit that should be clear is that you will have simpler to understand fees. Most depop fee calculations involve you taking into account the external processing fees that Paypal has, you can use a depop fee calculator here to simplify the process but it can still be hard to wrap your head around initially. With depop payments instead of having to account for multiple businesses taking a cut you just get to think about one simple fee.
- More options for buyers: Paypal is a very popular service for online shoppers but it has its limitations, buyers can often just pay with their card via paypal or money in their paypal balance. The move to depop payments means that depop is able to accept some more payment methods such as apple pay and google pay. More options will lead to better chances for you to sell (more on this later).
- Simpler management: Since your transactions and balance is all in one place the process of running your depop shop is made a lot easier
Cons of depop payments
- Longer processing times: Depop payments is not instant. It will take longer for your money to reach your bank account with depop payments. Payments that are sent to paypal will typically be instant and you can often use your money as soon as it arrives. Depop payments takes about 2 working days to process your payment before it is sent to your bank account. That’s a big change from instant isn’t it ? This may be a major con for some sellers!
What are depop payments fees ?
If you were hoping for a large reduction in fees as a result we are sorry to dissapoint you!
Depop payments fees are relatively similar to paypal but it is somewhat easier to reason about. The standard depop fee remains the same at 10% and they will charge processing/transaction fees, that’s it. Although there isn’t much of a difference regardless of how your buyers decide to pay, the fee may be slightly cheaper depending on where you are located, so you would have to check what the paypal fees for your country are and compare. Here is the fee table gotten from the depop website:
|2.9% + $0.30||2.9% + £0.30|
|3.49% + $0.49||2.9% + £0.30*|
Depop states that you may also be charged an additional 1.29% seller service fee for UK-EU transactions which is worth considering in your fee calculations.
You can read our depop fee guide here to learn more about depop fees.
Is depop payments mandatory ?
Depop payments is required for eligible sellers however you can still use paypal! and you should because it increases your options.
Depop payments will be around for a long while whether you prefer it as a seller or not. If you sell on depop the only other option is to branch out to other marketplaces. You can use a crosslisting app here to automatically list from depop to other marketplaces like vinted, ebay, poshmark and more!
If branching out does not seem like something you want to do at the moment then you’ll need to accept the new system and set up depop payments.
Will depop payments increase your sales ?
Let’s be real, you probably don’t care what method is used to get you your money as long as it lands in your hands as soon as possible. What you should care about as a depop seller is if depop payments will increase your sales!
We did touch on this a bit previously but depop payments can increase your sales because you will be giving your potential buyers more options to pay.
Paypal is popular but not everyone wants to go through them, you still have to log in and if you do not have a paypal account you need to get your card out and fill out a form, sometimes you may even be required to signup for paypal which a few buyers may not want to do.
Since depop is commonly used via a mobile app the addition of mobile payment options like Apple Pay is going to be very good for business. This is because it reduces the chances of a user “abandoning their cart” because they find it to be too much of a hassle to go through paypal. This applies more so if they do not already have a paypal account.
Apple pay for example is just 2 button clicks and a face ID away from a purchase, compared to entering multiple login details and card details. Let’s face it most online shopping isn’t always the most deliberate/thought through process, so any uneccessary friction will result in buyers leaving. In other words: the easier it is for people to pay you, the more likely it is that you’ll get paid.
If you are looking for more ways to increase your sales on depop, look no further: