Etsy says some sellers won’t receive their payments on time due to the sudden collapse of Silicon Valley Bank. In an email sent out to impacted shop owners, the company says it used the shuttered institution to send out deposits to “some sellers” and that they may not get their scheduled payments as a result, leaving shop owners worried about the future of their stores.
Etsy started notifying sellers about the potential delays on Friday, the same day the Federal Deposit Insurance Corporation and California regulators shut down Silicon Valley Bank. The bank served as a staple in the venture capital and startup industries, with companies like Etsy, Roku, and Roblox having funds tied up in the institution. The FDIC auction for the Silicon Valley Bank’s assets is expected to take place on Sunday afternoon, and if no buyer emerges, the FDIC will be forced to sell its assets in an attempt to reimburse depositors.
While Etsy hasn’t yet provided a timeline for when sellers can expect to receive their payments, company spokesperson Veronica Heino says Etsy is working to fulfill deposits using its other payment partners.
“We recently experienced a delay in issuing payments to some sellers related to the unexpected collapse of Silicon Valley Bank,” Heino says. “Our teams have been working around the clock to implement a solution, and we expect to pay sellers via our other payment partners within the next several business days.”
Many small business owners on Etsy rely on the income they receive from selling handmade products on the platform, and not receiving those scheduled payments could make it more difficult for them to front the costs associated with their craft. The owner of the Etsy shop Cultivated Laser, who goes by Gee, is just one of the many sellers affected by the delay in payments.
“The delay in deposits came at the most inopportune time for our business: right after a large inventory purchase and right before a move across the country,” Gee tells The Verge. “I have over 100 orders that have been fulfilled and shipped and have not received payment for.”
It remains unclear how many sellers are impacted by these delays, and it’s possible that not every shop owner has been notified yet. Since sellers have the option to set up daily, weekly, bi-weekly, or monthly payments, it looks like those with payments specifically scheduled for last Friday have been the only ones getting notified. This leaves those who have payments set up for any time in the near future anxiously waiting for communication from Etsy.
“I have my account set to deposit daily, so thankfully the amount of money in limbo is not a whole week’s pay,” cosplayer and Etsy seller Rachel Lynn, also known as Maridah, tells The Verge. “Still, I use my sales to budget my day-to-day expenses, and I do worry about how long the delay in getting my money could take.”
Aside from the email sent to sellers, an in-app notification, and a pinned post on Etsy’s forums, the company still hasn’t published any additional information about the potential impact Silicon Valley Bank’s collapse could have on sellers, causing frustration — and confusion — among shop owners.
Alison Ugur, the owner of HookN20, an Etsy shop that makes custom dice and crocheted dice bags, hasn’t yet been informed that she’s been affected by the payment delay, but says she never received any sort of in-app notification or email about Etsy’s exposure to Silicon Valley Bank. “If my mom hadn’t texted me, I still wouldn’t know about the bank collapse,” Ugur says. “There is no Etsy site update or alert, no communication. It feels not great.”
“I’m confused and concerned about Etsy and the future of my shop.”
Both Lynn and Gee expressed similar concerns, with Lynn noting that she never received a follow-up email about the delay in payments, making it harder for sellers to stay updated on the issue. “Searching for a statement from Etsy just brings up news articles,” Lynn says. “It’s frustrating to have to dig for this information.”
With her next payment date set for Monday, Ugur’s worried about whether or not she’ll actually receive the money she’s owed. “I have un-shipped orders that I haven’t received funds for,” Ugur explains. “If I ship them out tomorrow before my payment comes through, will I be paid for my work and when? I’m confused and concerned about Etsy and the future of my shop.”
Source: The Verge