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So I knew there was a risk after the bank went under but when I logged into my reverb account today, I saw this banner....
Payout delay
Some seller payouts from Friday, March 10, are delayed. We’re working with our payment partners to issue these payouts as soon as possible.
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03-13-2023 07:19 PM
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Just want to provide some domain context so people understand the issue. SVB is a bank partner Etsy (parent company of Reverb) uses to handle payment disbursement to sellers. It's NOT the case that the money Reverb would have used to pay you was wiped out. It's just that they couldn't process payments and disburse funds to some sellers. The capital assets still exist.
Here's a quick read if you want to understand why this impacted sellers. Etsy and other marketplace companies are not banks, but they work with banks to process payments. This is because there are regulations around processing payments that require specific banking licenses. Etsy's and other large martketplaces' strategy is, instead of getting licenses themselves and becoming banks, partner directly with banks who have these licenses. Here's a quick overview of how a payment happens.
I don't know if Etsy is an "big investor" in SVB, and that shouldn't affect sellers if they are. Etsy has other payment partners and this shouldn't create a long term issue (unless there are multiple correlated bank collapses, wouldn't be the first time).
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It's already created a problem. They are already not making payouts due to the lack of currency flow. Hence the announcement on their site.
Originally Posted by omphalopsychos
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I think you might be misunderstanding. The reason the payments are not going out is because one of their payment partners is down. They have other partners to process the payments. In other words, the issue with reverb is a delay, while they process payments through another partner, at worst. This is what I mean by not a major concern long term. It’s annoying but not as severe as the other scenario.
The headline in this thread makes it sound like Reverb lost your money, which is not the case.
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The reason there is a delay is because some of their money is tied up in a failed bank. While it's true they are not belly up, it's a big warning sign and no, i did not make it seem like they lost my money. I think you are misinterpreting. Originally Posted by omphalopsychos
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Don’t get me wrong, a bank collapse is always a big deal. But delays in my reverb payouts is the least concerning aspect of it to me.
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It's concerning to me if I can't get paid in a timely fashion for merchandise which I have sold but don't have the money or the merchandise. Yes, on a global economic scale, reverb is hardly a big player. Originally Posted by omphalopsychos
We're not in a global economic forum. We're in a gear forum. And the biggest reseller of used music gear not being able to make payments in a timely fashion is something that people in this forum would be interested in.
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This is the part I’m saying is incorrect. That’s not how payments work. The reason payments aren’t coming through is because SVB shut off it’s payment processing services. Here’s some documentation on what those services entail: Merchant Services: Payment Acceptance | Silicon Valley Bank Originally Posted by jzucker
They’ve sent out a memo saying that they’re continuing payment processing through alternative partners. Etsy begins processing seller payments via alternative partners after delays caused by SVB implosion | TechCrunch
The payments are delayed because the payment service is down. Not because money is locked up in an account at a failed bank.
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I agree this is a timely topic, I was just providing additional context and clarifying the nature of the issue for other readers.
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Speaking of payouts, I see fleabay is now asking for current photo ID and other personal info or they'll withhold payouts.
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This is likely related to heightened fraud and scamming activity. I know scamming has increased tremendously in my neck of the industry. Originally Posted by wintermoon
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Just spent another minute to see if I could dig up a better resource. Check this out if you're interested in understanding how a bank fits into payment processing for online marketplaces:
What’s an acquiring bank and why you need one - Adyen
The above is marketing material for adyen but still informative. (I don't work there)
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Scamming? Reverb? EBay? Noooooo! How can it be?
As far as payouts for sellers on Reverb is concerned, I saw on the news today that SVB had suspended wire transfers. Perhaps that would impact payouts.
However, shortly peoples' money should be available through FDIC insurance, etc. That may shake this loose. A good friend of mine works for a medical data processing company which might still qualify as a startup; their primary bank was SVB and he was just notified today that he will, in fact, be getting his paycheck this week. It sounds like the banking system safety net has kicked in and prevented a free fall- although like most things in finance that is driven emotionally and irrationally, rather than being a strictly mathematical situation. All it takes is for enough people to believe there's a freefall for them to actually create a freefall. Irrationality is king in human behavior.
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Regardless of some being scammed on this site recently, I still would put my trust and money with buying and selling on the Jazz guitar forum.
IMHO Reverb and Ebay becomes less attractive with every passing year.
(As always do your due diligence on sales.)
[BTW In the near future I will be selling a 2019 Hofner Jazzica Viloin French rub finish that I bought from Hammertone. The price will be the same as what HT charged me.]
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from reverb . com
Where is my recent payout?
Since Friday, March 10, some seller payouts have been delayed. This is due to the unexpected developments surrounding Silicon Valley Bank, which Reverb uses to make payments to some sellers. We are currently working with our payment partners to issue these payments as soon as possible.
What do I need to do?
There's nothing you need to do at this time. Your funds are safe, and we don't anticipate any further delays once our payment partners have issued your payment.
We know how important it is to receive your funds in a timely manner, and we appreciate your patience.
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And there are threads on all the gear forums from folks who have sold items last week and not only have not received payment but haven't even received correspondence from reverb regarding this issue.
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and there's this
Etsy is the parent company of reverb.
Etsy freezes some transactions after Silicon Valley Bank closure, squeezing sellers nationwide | Fox Business
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Originally Posted by Cunamara
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While I totally agree with this, part of the fault also lies in a system of currency and stocks that is not represented by ACTUAL value- it's just numbers. Which allows "freefall" to happen quite easily. But that's a whole 'nuther discussion. Originally Posted by Cunamara
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Welcome to late-stage Capitalism. Originally Posted by ruger9
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Maybe Reverb should pivot and rebrand as "Digital Delay"
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Those waiting payment can thank politics that it will still happen. Bank failures always look bad but a California bank providing primary support to the tech sector.. that would not be a good look for the Democrats. If this had been a Houston bank supporting small gas and oil it would have been a different story. It's unknown what the consequence of a guarantee on all bank deposits, even those beyond FDIC insurance, will be. However, there will be consequences.
As for Etsy.. can't see where they did anything particularly wrong. The villains would be CEO and Directors of SVB for the most part. Putting money in long term, very low interest bonds to cover a dynamic tech customer base in the middle of an unnatural boom and bust cycle was a bad error. They got burned in a cash crunch and being called on it brought down the bank.
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I will back off in just a sec but this is again incorrect. The reason we will still get payments has nothing to do with the bail out. We will get payments is because Etsy has other payment processing partners that they will use to get the payments finalized. Originally Posted by Spook410
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I was unable to find an actual percentage of operational dollars for Etsy and SVB. Roku was an insane 24%. Several others were in the 10% range. A business does not shrug off that kind of impact. So while Etsy would have us believe this is as simple as reaching for a different checkbook, I find this story works best for the less cynical. Or those not experienced with how money moves in large organizations. Originally Posted by omphalopsychos
Hopefully everyone would have, eventually, been made whole. No timeline was provided other than 'next several business days' and 'be patient'. Of course that delay depended on the how much in the way of operational funds were in SVB. A number that doesn't immediately come to hand and Etsy wasn't advertising. If it were a large number, both policy and structural impacts would have to have been addressed in the response. Payroll, lease payments, debt servicing.. all would be on solid ground first. Seller payout, no doubt key to their business model, would likely follow. How long would it have taken in a major loss scenario? We'll never know.
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The answer is in Hunter Biden’s laptop. Although, I do believe a couple of dozen trans kids spread across a nation of 350 Million contributed. Also, did I mention 5 Million immigrants enter every day! No wonder the bank failed! Originally Posted by Spook410
Seriously, can you give those political fantasies a break? Not everything fits your ridiculous Democrats/Republicans duality. In what universe do you think the US government doesn’t lavish money and support on the oil and gas industry? Or that Republicans are somehow anti-banking industry?
Can’t you just keep that nonsense as a Facebook meme where it belongs?
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