Etsy has shut down in Africa due to payments, or is it?

This is the email sent to Etsy vendors, predominantly in the global south markets such as Africa and Latin America.

Dear ,

Starting August 5, we’ll be standardizing the payments process so that all sellers on Etsy are using Etsy Payments. Buyers and sellers have told us over the years that Etsy Payments provides a more streamlined payment process when they’re shopping or selling on Etsy, and we have prioritised making Etsy Payments available to as many sellers as possible.

Unfortunately, due to resource considerations, we are unable to bring Etsy Payments to Iceland at this time. After careful consideration, we‘ve made the difficult decision to stop supporting standalone PayPal on August 5. As a result, we’ll be closing seller shops in Iceland.

What this means for you

As a seller in Iceland, August 4 will be the last day you’ll be able to receive an order, and your shop will be closed August 5. If you need to process refunds or returns, you’ll be able to do that until December 31 through your PayPal account. You’ll also be able to message your customers until December 31. We recommend downloading your shop data before August 5 if you want to keep it for your personal records.

Why is Etsy Closing Accounts?

Etsy is enforcing a unified payments ecosystem, Etsy Payments, across its entire seller base. Sellers in countries where this solution isn’t available (like several African nations) are being removed, as Etsy is sunsetting support for standalone PayPal acceptance on August 5, 2025.

Etsy cited “resource limitations,” which could indicate they cannot expand their payment infrastructure to every country due to compliance, fraud, operational, or financial barriers. This move streamlines internal management but forces active shops in unsupported regions to close.

But Why Is Etsy Payments So Important for Etsy?

Etsy Payments is more than just a convenience: it offers security, fraud prevention, chargeback management, buyer trust, and a consolidated seller experience.

Relying on third-party processors, like PayPal alone, creates complexity, increases risk exposure, and weakens the control Etsy has over user experience and dispute mediation.

Unifying payments is also an industry norm as platforms scale, driven by regulatory, efficiency, and profit motives.

Why Not Use Alternative Payments?

From the outside looking in, Etsy has 3 alternatives the business could explore:

• Allowing PayPal or other region-specific gateways indefinitely.

• Partnering with regional fintechs.

• Licensing local payment technologies.

Each alternative means additional increases in risk and overhead. Meaning:

• Risk Mitigation: Increasing exposure to payment fraud and compliance risks in newer or complex markets.

• Efficiency and Scale: Decentralising payment management could increase support resources required and overhead costs.

• Legal and Regulatory: Adhering to different country-level regulations would require substantial resources and might not be proportionate to the potential market size or revenue from those regions.

• Brand Integrity: There could be a lack of consistent customer experience and a crippled dispute resolution system-wide.

**Thinking like an Etsy executive…**I would also factor in other strategic reasons behind the decision, such as:

• Profitability: Internal payment systems often capture more revenue and data, aiding future growth and personalisation.

• Opportunity cost: What does the company stand to lose by cutting off the regions that do not support Etsy payments?

Let’s Look At The Numbers

While Etsy has not published the number of merchants affected by this decision, idiomatic reports suggest there are several thousand sellers across unsupported markets.

• Etsy reports approximately 5.4 million active sellers as of Q1 2025.

• The company had a gross marketplace sales (GMS) totalling $10.9 billion in 2024.

• Etsy processes approximately 30–34 million transactions per month worldwide.

• North America and Western Europe account for more than 90% of platform sales activity.

However, in the context of Etsy Payments, the company reported that around 99% of its GMS came through Etsy Payments.

With this context, here’s how the numbers look:

• At worst, the company is at a 1% loss in total sales for Etsy.

• This comes to an estimated 54,000 sellers.

• The lost market activity equates to approximately $109 million in GMS.

• The closure would reduce monthly Etsy transactions by an estimated 300,000 transactions per month.

• The average shop in affected countries thus handled roughly 3 - 6 sales per month.

Zooming back out, this is a tiny share compared to Etsy’s core markets. As an executive, the opportunity cost of closing out these markets is obvious.

Lessons learned:

However, the greatest impact hits shops whose owners depend on Etsy for primary income. Many have voiced distress online, citing abrupt loss of income and few alternative channels with similar international reach. Despite this, it is unlikely that Etsy will reopen these markets. So what are the takeaways from this?

• Global expansion requires robust, adaptable payment infrastructure and strong regulatory navigation.

• Where dominant platforms withdraw, localised and diaspora-focused e-commerce can thrive if they address payment, logistics, and trust challenges.

• Transparency and seller support will be a competitive advantage for new entrants where global giants falter due to one-size-fits-all policies.

The Opportunity for African Startups

This decision marks a pivotal moment for international sellers and platform growth strategies across the continent and beyond. For African entrepreneurs and tech leaders, it’s also a rare window to capture talent, creativity, and commerce displaced by global consolidation.

By integrating local payment providers and focusing on reliable logistics, they can offer services tailored to both African sellers and international buyers.

These platforms can fill trust and logistics gaps left by Etsy, offering faster shipping, lower costs, and direct-to-consumer channels that avoid intermediaries.