Etsy delays payouts to sellers after the collapse of Silicon Valley Bank

Etsy says some sellers won’t receive their payments on time due to the sudden collapse of Silicon Valley Bank. In an email sent to affected store owners, the company says it has used the closed institution to send deposits to “some merchants” and as a result they may not receive their scheduled payments, leaving store owners concerned about the future of their stores. .

Etsy began notifying sellers of the potential delays on Friday, the same day the Federal Deposit Insurance Corporation and California regulators closed Silicon Valley Bank. The bank served as a staple of the venture capital and startup industries, with companies like Etsy, Roku, and Roblox holding funds in the institution. The FDIC auction for Silicon Valley Bank’s assets is expected to take place Sunday afternoon, and if no buyer shows up, the FDIC will be forced to sell its assets in an attempt to repay depositors.

In a statement to CoinTech, provided by Etsy spokeswoman Veronica Heino, the company says it is working to process deposits through its other payment partners, and will resume some payments starting Monday, March 13.

“We recently experienced a delay in issuing payments to some sellers in connection with the unexpected collapse of Silicon Valley Bank,” Etsy says. “Our teams have been working around the clock to implement a solution and we expect to pay merchants through our other payment partners within a few business days and to be able to process those payments by tomorrow, March 13. ”

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 can make it more difficult for them to cover the costs of their craft. The owner of Etsy shop Cultivated Laser, whose name is Gee, is just one of many sellers affected by the late payment.

“The delay in deposits came at the most inconvenient time for our company: right after a major inventory purchase and just before a move across the country,” Gee tells CoinTech. “I have over 100 orders that have been fulfilled and shipped and no payment has been received.”

It remains unclear how many merchants will be affected by these delays, and not every store owner may have been notified yet. Since merchants have the option to set up daily, weekly, biweekly, or monthly payments, it seems those with payments specifically scheduled for last Friday are the only ones notified. As a result, those who have set up payments for any time in the near future anxiously await communications from Etsy.

“I’ve set up my account to deposit daily, so luckily the amount that’s in limbo isn’t an entire week’s wages,” cosplayer and Etsy seller Rachel Lynn, also known as Maridah, tells CoinTech. “Still, I use my sales to budget for my day-to-day expenses, and I worry about how long the delay in receiving my money may be.”

Aside from the email sent to sellers, an in-app notification, and a pinned post on Etsy’s forums, the company has still not released any additional information about the potential impact the collapse of Silicon Valley Bank could have on sellers, causing frustration and confusion—among shopkeepers.

Alison Ugur, the owner of HookN20, an Etsy shop that makes custom dice and crochet dice bags, has not yet been notified that she has been affected by the late payment, but says she has never received any form of in-app notification or email. received mail about Etsy’s exposure to Silicon Valley Bank. “If my mother hadn’t texted me, I still wouldn’t have known about the bank collapse,” says Ugur. “There is no Etsy site update or warning, no communication. It doesn’t feel great.”

“I’m confused and worried 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 more difficult for merchants to stay on top of the issue. “Searching for a statement from Etsy only returns news articles,” says Lynn. “It’s frustrating to have to search for this information.”

With her next payment date set for Monday, Ugur worries whether or not she will receive the money owed to her. “I have unshipped orders for which I have not received any money,” explains Ugur. “If I send them tomorrow before I receive my payment, will I get paid for my work and when? I am confused and concerned about Etsy and the future of my shop.”

Update March 12, 7:19 PM ET: Updated to add additional information from Etsy regarding some payments that will resume on March 13.

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