Etsy's Payment Problems Are OpenBazaar's Opportunity

Since July 1, Etsy Inc has had a major payment processing problem. But while the problem is still unresolved, the 24/7 Bitcoin payment network can certainly fill the void.

Also read: OpenBazaar is Here but Darknet Markets Will Remain

Etsy’s 3rd Party Payments Processing Problem

Many of its orders made using credit cards and gift cards are stuck in processing. Etsy is using the London-based company, Worldpay Group Plc, to process orders but the company has a bug in their system, resulting in delays in payment confirmations. Paypal orders are unaffected, however.

User “WELOVELILLY” on Etsy’s Bugs forum wrote on Wednesday:

I have several orders pending from July 1st and 3 pending today. I am so surprised that it is taking 5 days or more to clear payments?

This is not an isolated incident. Etsy has had problems with Worldpay’s payment processing before. In February, a similar issue occurred causing merchants to lose sales around Valentine’s Day.

Affected merchants received an email on July 1 from the company stating:

Your shop may have been affected by a recent technical issue experienced by Etsy’s third-party payment processor that has resulted in delays confirming some of your orders.

Merchants Upset Over Lost Sales, Angry Customers

Some Etsy store owners lost out on a significant portion of sales as many were hoping to see a boost over the fourth of July weekend, selling holiday-related or patriotic items. Also, many had to deal with angry customers who paid but could not get their orders fulfilled. While merchants got an email from Etsy explaining the problem, customers did not.

One Etsy merchant, TheBouillonQueen, wrote on Reddit:

What’s worse, is I’m the one getting yelled at, scolded, and losing money because of this mistake. They did not issue an email out to buyers to explain the situation, nor did they tell the sellers what was going on. I had to find out about this when I had 3 people tell me they couldn’t get their orders.

Looking for Alternatives

The problem is still happening, and some store owners are looking for an alternative.

“I haven’t found anything like Etsy… Which is really unfortunate, especially in light of the last 6 days. I would jump ship in a heartbeat if there was an alternative,” user “babytoes” wrote on Reddit in response to another user asking for an Etsy alternative.

Can OpenBazaar be the Answer?

Although the problems are technically with Etsy’s credit card processor and not with their platform itself, store owners who switch to OpenBazaar (OB) or just add an OB store will step around that problem. They will also be able to sell their wares to anyone worldwide over the world’s first truly open and global marketplace, instantly.

OB is not a company; it’s an application on the computer, like MS-Word or BitTorrent. It doesn’t have any payment processors integrated with it, so Etsy’s problem will not be making an appearance on OB. Instead, OpenBazaar stores only accept bitcoin, which the platform then holds in escrow for the duration of the transaction, making sure that no one gets cheated, like so often happens with credit cards and Paypal today.

Looking beyond the technical backbone of each Platform, Etsy and OpenBazaar both have storefronts showing products as the main page. Both have user accounts with a reputation system, and both are packed full of arts, crafts, and physical items such as shirts, pins, and clothing. With OB’s ability to customize header graphics and color schemes, users can even make their storefront look very close to their Etsy storefront.

Setting Up a Store at OpenBazaar

The catch is, of course, the learning curve it takes to become proficient with OpenBazaar, and of course, users have to leave their store running on a computer they control in order for customers to find it. This tutorial shows how to set up an OB store and will help Etsy merchants migrate.

For those who are a bit more adventurous with their computer, there is already a way now to Import Etsy listings directly into an OpenBazaar store.

Do you think Etsy merchants should use OpenBazaar? Let us know in the comments below!

Image courtesy of CNBC, Worldpay, OpenBazaar