How Etsy Payments Work for Sellers

Etsy Payments is the built-in system that lets buyers pay in multiple ways while Etsy collects the money and routes your earnings to your shop’s payment account. Each order first lands as a balance on Etsy, then processing fees, refunds, and seller fees are netted out before anything is marked available for deposit. From there, Etsy sends funds to your bank on the deposit schedule you choose, but new shops, bank detail changes, or a payment account reserve can create delays. Most payout confusion comes from watching the wrong number, so a quick check of what’s pending, what’s reserved, and what’s actually ready to transfer brings peace of mind.

Etsy Payments eligibility, required shop details, and enrollment steps

Countries where Etsy Payments is available

Etsy Payments is not optional in places where it’s supported. When you open a shop in an eligible country, enrollment is part of setup so buyers can use Etsy’s checkout.

Availability is country-specific, and Etsy updates the list over time. The most reliable place to confirm whether your country (and bank country) can use Etsy Payments is Etsy’s official list of Countries Eligible for Etsy Payments.

A few practical notes matter here:

• Some countries use Etsy Payments through a Payoneer Payment Account rather than a standard local bank setup.
• In some regions, Etsy may restrict new shop creation even if existing shops can continue (this has been the case for China).
• Etsy can require an active credit or debit card on file for enrollment in certain markets, so plan to have one ready during setup.

Bank account and identity verification requirements

To enroll and get paid, Etsy needs enough information to verify you and route deposits correctly. Expect to provide:

• A residential address in your eligible country.
• A valid bank account in that same country for deposits (Etsy does not deposit payouts to your own PayPal account).
• Identity details such as your legal name, date of birth, and in some locations a tax ID.
• In many cases, a government-issued photo ID upload.

If you’re in the US, bank verification may be handled through a third-party connection during setup or when you change bank details.

What happens if you cannot enroll

If Etsy Payments is not available in your country, you usually cannot open a new Etsy shop at all. If Etsy Payments is available but you cannot complete enrollment (for example, you don’t pass identity checks or don’t verify bank details in time), Etsy can pause payouts and may suspend selling until the required steps are completed.

Etsy Payments fee breakdown for transactions and processing

Transaction fee vs payment processing fee

On an Etsy order, you’ll usually see two different fee types that sellers mix up:

Transaction fee: Etsy’s marketplace selling fee. It’s 6.5% of the total order amount in your listing currency, and it applies to what the buyer pays for the item plus shipping and gift wrap (if you charge those).

Payment processing fee: The card and payment handling cost for orders paid through Etsy Payments. This fee is a percentage + a flat fee per order, and the exact rate depends on the country where your bank account is located. Etsy publishes a current table of rates in its Help Center article on payment processing fees for selling on Etsy.

One practical detail: payment processing is calculated on the total sale amount, which can include shipping and, in many setups, sales tax collected through checkout.

Currency conversion fees and when they apply

Currency conversion is a separate cost, and it’s triggered by your settings, not by where the buyer lives.

If your listing currency is different from the currency of your Payment account, Etsy converts the sale and charges a 2.5% currency conversion fee on the sale amount. This fee is taken before funds show up in your Payment account, so your “available” balance is already net of the conversion. Etsy explains the rule and the 2.5% rate in its Currency Conversion Fees guidance.

International orders and cross-border fee scenarios

“International” can change fees in a few different ways:

• Different processing rates in some countries: In certain regions (like Canada, Australia, and New Zealand), Etsy’s payment processing fee can be higher for orders categorized as international.
• No extra “international transaction fee” from Etsy itself: The core Etsy transaction fee is still based on the order total, regardless of buyer country.
• Seller-location add-ons: Some sellers also see a Regulatory Operating Fee based on where the shop is located, which can make international selling feel more expensive even when the buyer isn’t the reason.

Deposits explained: how your Etsy balance reaches your bank

Deposit schedule options and processing times

Etsy deposits are how money moves from your Etsy Payment account to your bank. You pick a deposit schedule in Shop Manager, and Etsy sends whatever is available for deposit on that cadence.

Most sellers can choose daily, weekly, biweekly, or monthly deposits. New sellers are typically set to weekly by default. After Etsy marks a deposit as sent, it can take up to 1 to 5 business days to show up in your bank, depending on your bank’s processing time. If your deposit date lands on a weekend or bank holiday, Etsy sends it on the next business day. These timing rules (and where to change your schedule) are outlined in Etsy’s guide on How to Receive Your Etsy Payments Deposit.

Deposit minimums, thresholds, and payout holds

Not every shop can cash out tiny amounts. In some countries, Etsy sets a deposit minimum, and some markets also have a fee threshold where a small deposit fee may apply if your payout is under that threshold.

Separately, Etsy may delay deposits when your account needs extra verification or risk checks apply. Common examples include:

• A 5-day hold after you update bank details.
• A Payment account reserve, where a percentage of funds stays unavailable for a period of time.

Instant transfer availability and fees

If you’re an eligible US seller, Etsy may offer instant transfer as an optional faster payout method. Instant transfers are designed to arrive quickly (often within minutes), but they come with limits and a fee that’s shown during the transfer flow. Etsy also caps instant transfers to a maximum amount per day and requires a minimum transfer amount.

Supported buyer payment methods through Etsy Payments

Cards, Etsy gift cards, and Etsy credits

When your shop is enrolled in Etsy Payments, most buyers can check out with credit cards and debit cards, plus Etsy gift cards and Etsy credits. Etsy gift cards and credits are worth calling out because they behave a little differently than a card payment. A buyer can use a gift card or Etsy credit first, and if it doesn’t cover the full total, they can pay the remainder with another accepted method.

From a seller perspective, this all still lands in one place: your Etsy Payment account. You’re not juggling separate card processors for different buyer choices. Etsy lists the common buyer options in its overview of What is Etsy Payments?.

PayPal via Etsy Payments vs standalone PayPal

There are two different “PayPal” concepts sellers run into:

PayPal via Etsy Payments means the buyer can choose PayPal at checkout, but you do not receive the money in your PayPal account. The funds flow into your Etsy Payment account like any other Etsy Payments order, and you generally won’t be paying separate, standalone PayPal processing outside Etsy’s system.

Standalone PayPal is the older setup where PayPal was handled separately from Etsy Payments. In many countries, once you enroll in Etsy Payments, Etsy removes standalone PayPal because Etsy wants checkout to run through one system.

Also, PayPal is not available in every Etsy Payments country. For example, Etsy notes that PayPal is not available for Etsy Payments sellers located in Israel.

Apple Pay, Google Pay, and local methods by country

Etsy Payments can also support modern wallets like Apple Pay and Google Pay, but availability depends on the buyer’s device, browser, and location, plus what Etsy has enabled in the buyer’s country.

In some markets, Etsy also offers local payment methods through Etsy Payments. Examples Etsy currently lists include Klarna (in certain countries), Klarna Invoice (Germany), and iDEAL (the Netherlands).

Order to payout: the funds flow from sale to deposit

Sample payout timeline for common order scenarios

A typical Etsy Payments sale follows a simple path: order paid -> funds move into your Payment account -> funds become available -> Etsy sends a deposit -> your bank posts it.

Here are a few real-world timelines sellers commonly see:

• Established shop, no issues: Many orders become available quickly (often the next business day). Then your deposit runs on your schedule, and your bank may take 1 to 5 business days after Etsy sends it to post the funds.
• New shop: Etsy may hold funds longer at first. It’s common for new sellers to see funds become available about 14 to 20 days after a sale, depending on shop standing.
• Instant transfer (when available): If you request an instant transfer, funds are typically available in about 30 minutes, but Etsy limits how often and how much you can transfer in a day.

Deposits when you have open orders and reserves

Having open orders does not automatically stop deposits. What matters is whether the money is available.

If your shop has a Payment account reserve, Etsy holds a percentage of funds from new physical-item sales. Those reserved funds usually become available when you add valid tracking and Etsy can confirm the order is in transit, or after the reserve holding period. Etsy also notes reserved funds become available at 6pm ET on the release day.

Pending, available, and reserved funds in Payment account

Think of your Payment account like a running ledger:

• Pending: money from recent orders that isn’t cleared for deposit yet.
• Available for deposit: the amount Etsy can send to your bank on your next payout.
• Reserved: funds held back by a reserve so refunds, chargebacks, and fees can be covered.

Also important: Etsy fees and services (like shipping labels or ads) come out of your Payment account balance first, which can reduce what’s available.

Where to see payment details in Shop Manager

Open Shop Manager -> Finances -> Payment account to see your current balance, what’s available for deposit, and a line-by-line view of activity. For deeper reconciliation, use the monthly statements and CSV exports in the same area, as shown in Etsy’s guide to How to Manage Your Payment Account.

Refunds, chargebacks, and cancellations: how payouts change

Full and partial refunds and processing fee treatment

When you issue a refund through Shop Manager, Etsy pulls the refund amount from your Payment account. If your Payment account doesn’t have enough to cover it, Etsy charges the credit card on file for the remaining amount. This is why a refund can still go through even if you recently deposited everything out.

The good news is that when you refund an order through Etsy, Etsy automatically credits back the transaction fee and payment processing fee tied to the refunded transaction. If you also cancel the order, Etsy also credits the related listing fee. Etsy walks through this in How to Issue a Full or Partial Refund For an Order.

Partial refunds work the same way, but the fee credits are adjusted to match the new (lower) sale amount rather than the original total.

Chargebacks and payment disputes impact on your balance

A chargeback is different from a normal refund. It’s when the buyer disputes the charge with their bank, card company, or PayPal. Once a chargeback is filed, Etsy disables the normal “Issue a refund” flow for that order to avoid a duplicate credit. Etsy also can’t decide the outcome; the financial institution does. Details are explained in Chargebacks on Etsy.

From a payouts standpoint, chargebacks can create a negative Payment account balance or reduce future deposits. Etsy may recoup the amount from your available funds, reserve funds, or future sales.

Refund timing and whether deposits can be reversed

Refund timing is usually the biggest expectation gap. After you issue a refund, it often takes 3 to 5 days to appear back in the buyer’s account, and some payment methods can take longer.

If you already received a deposit for that order, Etsy won’t “pull back” the bank transfer itself in most cases. Instead, the refund is covered by deducting money from your Payment account (or charging your card on file), which reduces upcoming deposits until the refund is fully accounted for.

Tax forms and reporting tied to Etsy Payments deposits

1099-K and reporting thresholds by country

If you’re a US seller using Etsy Payments, Etsy may issue a Form 1099-K for your shop based on IRS rules (and sometimes based on your state’s separate threshold). The IRS is phasing in a lower federal reporting threshold for third-party platforms, moving from $5,000 for 2024 to $2,500 for 2025, then $600 for 2026 and later. The IRS summarizes the current phase-in on its page about Form 1099-K.

If you’re not a US seller and you don’t file US taxes, you generally won’t receive a 1099-K from Etsy. Etsy’s reporting for this form is tied to Etsy Payments activity, and it’s based on gross payments processed, not your profit.

Reconciling Etsy deposits with fees, refunds, and taxes

A common confusion point is that Etsy deposits are net, but tax forms are often based on gross.

That means the number hitting your bank can be lower because Etsy has already subtracted things like transaction fees, payment processing, refunds, shipping labels, and ads. Your 1099-K (if you receive one) can look “too high” at first glance because it generally does not subtract those expenses.

To reconcile cleanly, treat your deposit as a transfer of funds, not your revenue number. Start with your gross sales and then subtract Etsy fees, refunds, and other expenses to get to net income. Etsy explains what’s included in gross totals in its Seller Handbook article on making sense of your tax forms.

Recordkeeping tips using monthly statements and CSV exports

For bookkeeping that holds up at tax time, save these regularly from Shop Manager:

• Monthly statements for a month-by-month summary.
• CSV exports from your Payment account for line-item detail (fees, refunds, deposits, and adjustments).

If you run multiple Etsy shops, keep records per shop, but also be ready to combine totals when your taxpayer ID is the same across shops.