Some Etsy users, many of whom are artists and artisans seeking to monetize their work, worry about fees and privacy on the platform. (photo by Mick Haupt via Unpslash)

Selling on Etsy is becoming increasingly complicated as the platform grows. Additional fees, advertising requirements, and competition with “resellers” have left many artists and designers unsure of their financial security. Now, the online marketplace is requiring all sellers in the United States to verify their bank account information with Plaid, a fintech company that recently settled a class-action lawsuit after Venmo users accused it of stealing their data.

Since late August, Etsy sellers across the country have claimed that the Plaid verification process feels like an invasion of privacy, primarily the requirement that users must enter their online banking username and password. The Indie Sellers Guild, a new union that organized the week-long “Etsy Strike” in April, is now advocating for an end to the Plaid partnership.

“Etsy sellers aren’t okay with being forced to share our private financial data with a third-party service in order to keep our shops open,” the Guild wrote in a press release. “It’s one thing for sellers to freely choose to use a service like Plaid, to consider the security risk and loss of privacy and decide that it’s worth it. It’s another thing entirely to be forced to give up privacy rights and sign up for a service that we do not want in order to keep getting paid.”

Since April, the Guild has recruited more than 2,600 of Etsy’s four million sellers (the company listed upwards of 96 million users in late 2021), received more than 86,000 signatures on a strike petition, and published a second petition after the Plaid news. Interim President Kristi Cassidy, a Rhode Island-based clothing designer whose Auralynne shop has been on the platform since 2006, told Hyperallergic that her business is starting to feel unsustainable.

“The company had to know that we were not going to be happy about this,” she said. “This is leading people to doubt that Etsy has their best interest in mind.”

Cassidy claims the Plaid partnership reflects Etsy’s waning regard for independent artists, which dates back to its first fee increase in 2018. Since then, she notes, the company has given search priority to sellers who offer free shipping, mandated advertising fees for anyone making at least $10,000 per year, and launched a since-revised star seller program that disproportionately rewards resellers of already made items — all of which imposes challenges on anyone making handmade goods and custom listings.

“It’s hard trying to do your own thing,” Cassidy lamented. “None of us have the power of a giant company like Etsy to dominate Google searches.”

In response to Hyperallergic’s request for comment, an Etsy spokesperson said, “As part of our efforts to protect our users, reduce the risk of fraud and account takeover, and to meet evolving legal requirements, Etsy is working to verify bank accounts. This is best practice across many industries, including other ecommerce marketplaces. Sellers are able to have their accounts verified instantly or, if they prefer, use a micro-deposit based account linking option that does not require sharing account credentials.” 

Since at least 2018, Plaid has been accused of posing as various bank institutions on money apps like Venmo and Robinhood to collect and sell users’ data. The company denies all wrongdoing, however, and opted for a $58 million settlement for the lawsuit last year. In a statement sent to Hyperallergic, a Plaid spokesperson expressed their commitment to transparency on all data usage.

“The claims raised in the lawsuit do not reflect our practices,” the spokesperson said. “We do not, nor have we ever, sold data. We make our role and practices clear, and provide services that give consumers control over how and where they share their data.”

The fintech’s Auth product, an app programming interface adopted by Etsy, increases the speed and security of payouts for US sellers, allowing for instantaneous money transfers and minimal room for error when users enter their account and routing numbers. Etsy’s site states that the service helps payments prevent money laundering and fraud, citing a “manual solution” for sellers who opt out. 

At the same time, Etsy sellers are struggling with account verification through Plaid. Some received email messages claiming their information could not be verified, only to receive a follow-up email stating otherwise. Etsy did not immediately respond to Hyperallergic’s multiple requests for comment, but the Plaid spokesperson stated that any frustration over the partnership is a “misunderstanding.”

“We are committed to providing a secure experience for anyone using Plaid to safely and easily connect their financial accounts to the apps and services they want to use,” they continued. “We welcome anyone with questions or concerns to contact our support team directly.”

Editor’s note 9/27/22 10am EDT: This article has been updated to include a statement from Etsy.

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Billy Anania

Billy Anania is an editor, critic, and journalist in New York City whose work focuses on political economy in the cultural industries and the history of art in global liberation movements.

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