Etsy warns sellers of payment processing delays due to Silicon Valley bank collapse
An employee walks past a quilt with Etsy Inc. signs at the company’s Brooklyn headquarters.
Victor J Blue/Bloomberg via Getty Images
Etsy warns seller that the Collapse of the Silicon Valley Bank on Friday is causing delays in processing payments, according to a company email shared with NBC News.
The online do-it-yourself megashop said it has used SVB to facilitate payouts to some sellers and is working with other payment partners to make deposits.
“We wanted to let you know that there is a delay in your deposit scheduled for today,” Etsy’s email read.
“We know you count on us to run your business and we understand how important it is for you to get your money when you need it,” the email continued. “Please note that our teams are working hard to resolve this issue and get your money to you as soon as possible.”
Etsy did not immediately respond to a request for comment.
Etsy claims 7.5 million sellers worldwide. Regulators declared SVB bankrupt around midday Friday to end a bank run on the tech lender that began Wednesday after it announced it would raise more than $2 billion.
One affected Etsy seller told NBC News that delaying payments would have a “catastrophic” impact on his business.
Owen McKinney, who runs Kentucky Country Home’s laser engraving business, said in an email that he relies on the deposits to pay for items like shipping and materials. He said he has already reached out to one of his suppliers to postpone an order for supplies he needs for next week.
“As of this writing, Etsy has not provided a timeline for the funds to be deposited,” McKinney said. “Even though I have a website, Etsy remains a big part of my business.”
The drama with SVB began earlier this week when the bank made the announcement approximately $21 billion worth of securities sold and proposed offering over $1 billion worth of stock, all to raise funds for “general corporate causes”.
This move caused a stir among investors, who wondered why the SVB suddenly had to raise so much money. It also worried depositors, many of whom suddenly wondered if their money was safe and began withdrawing funds.
On Friday, the California Department of Financial Protection and Innovation said that was the case Takeover and closure of the SVB to protect deposits, naming the Federal Deposit Insurance Corporation as recipient. The FDIC has created a separate entity where all insured SVB deposits — up to $250,000 per depositor — will be available by Monday morning.
The closure comes after a turbulent morning for SVB, which halted trading in its shares after falling double digits before markets opened. That plunge followed a more than 60% drop on Thursday.
According to FDIC data, the shutdown marks the largest bank collapse since the 2008 financial crisis and the second largest in U.S. history after the collapse of Washington Mutual during that industry-wide meltdown.
https://www.cnbc.com/2023/03/11/etsy-warns-sellers-of-delay-in-processing-payments-due-to-silicon-valley-bank-collapse.html Etsy warns sellers of payment processing delays due to Silicon Valley bank collapse