On August 5, 2025, Etsy implemented one of its most controversial policy changes, effectively shutting down thousands of African-based stores by discontinuing support for standalone PayPal payments. This move has devastated countless sellers across the continent who relied on the platform as their primary source of income.
The Policy Change That Changed Everything
Etsy’s decision centered on standardizing payments across its entire platform by requiring all sellers to use Etsy Payments. The company announced that starting August 5, 2025, it would no longer support standalone PayPal transactions, forcing sellers to either migrate to Etsy Payments or lose access to the platform entirely.
The timing was particularly harsh for African sellers. While Etsy Payments is available in over 40 countries worldwide, only three African countries — South Africa, Egypt, and Morocco — currently have access to this payment system. This left sellers in major markets like Nigeria, Kenya, Uganda, Ghana, and dozens of other African nations without any viable payment option to continue operating their shops.
The Numbers Tell a Devastating Story
The scale of this shutdown is staggering. According to industry analysis, approximately 54,000 sellers were affected globally, with a significant portion being African-based businesses. This represents about 1% of Etsy’s total seller base of 5.4 million active sellers.
Personal Stories of Impact
The human cost of this decision is perhaps best captured in the personal stories of affected sellers. Nancy, a Kenyan handmade seller who operated three shops under the brand Mzizi Africa, shared her heartbreak on Reddit: “For over five years, Etsy has been my primary source of income… This news is heartbreaking, especially after dedicating so much time, effort, and passion to building a reputable brand”.
Another seller from Uganda received a stark email from Etsy stating: “Unfortunately, we cannot bring Etsy payments to Uganda right now so your shop will be closed on August 5th”. The seller expressed frustration at the “conclusive decision” with no recourse available through Etsy’s support system.
The PayPal Connection
The controversy runs deeper when examining Etsy’s relationship with payment processors. Many African sellers had successfully operated for years using standalone PayPal as their payment method. PayPal has been widely accessible across Africa, with many sellers building their entire business models around this payment system.
However, Etsy’s move to eliminate standalone PayPal was driven by several factors:
- Risk mitigation: Standalone PayPal transactions increased exposure to payment fraud
- Customer protection: Etsy couldn’t provide buyer protection for PayPal-only transactions
- Operational efficiency: Managing multiple payment systems created complexity and overhead costs
The Payoneer Paradox
Perhaps most frustrating for affected sellers is Etsy’s inconsistent use of Payoneer, a payment processor that officially supports over 150 countries, including major African markets like Kenya, Nigeria, Ghana, Uganda, Rwanda, Zambia, and Zimbabwe.
Etsy partners with Payoneer to extend Etsy Payments to countries like Argentina, Brazil, Chile, China, Egypt, Georgia, India, and others. Yet despite Payoneer’s extensive African coverage, Etsy has chosen not to activate this partnership for most African countries, suggesting the exclusion is based on policy choices rather than technical limitations.
The Broader Implications
Etsy’s decision reflects a broader trend in global e-commerce where platforms prioritize efficiency and risk management over inclusive access. The company’s internal data showed that 99% of its gross marketplace sales already came through Etsy Payments, with North America and Western Europe driving over 90% of platform activity.
From Etsy’s perspective, the business case was clear: the operational complexity and potential risks of supporting diverse payment systems in emerging markets outweighed the revenue from these regions. However, this “one-size-fits-all” approach has effectively excluded an entire continent of creative entrepreneurs.
Looking Forward
The Etsy shutdown has created both challenges and opportunities. While thousands of sellers lost access to a global marketplace they had spent years building on, it has also catalyzed the development of Africa-focused alternatives that better understand local payment systems, logistics challenges, and cultural nuances.
As ab industry analyst noted here: “When tech giants prioritise efficiency over inclusion, innovative local entrepreneurs can capture the spillover”. The question now is whether these emerging platforms can successfully fill the void left by Etsy and provide African creators with sustainable access to global markets.
The story of Etsy’s African shutdown serves as a reminder of the digital divide that still exists in global e-commerce, and the ongoing need for payment and logistics infrastructure that truly serves emerging markets. For the thousands of displaced sellers, the challenge now is rebuilding their businesses on platforms that recognize Africa’s creative potential and are willing to invest in the infrastructure needed to support it.
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