Etsy expands Purchase Protection: What sellers need to fix before 7 May
Reading Time: 3 minutes Etsy is updating its Purchase Protection programme from 7 May, and…
Etsy has announced important updates to its new Etsy Payments Policy, effective October 9, 2025, impacting how sellers’ funds are held, deposited, and managed for compliance and risk control. The changes aim to improve transparency and regulatory compliance, with added policies for sellers in Canada and strengthened actions for account-related issues.
Key points and key dates:
- Effective Date: October 9, 2025.
- Etsy may now place holds and delays on deposits for any accounts believed to be related, especially under applicable law.
- Etsy Payments Policy specifies Etsy’s agent role for US sellers in receiving and settling payments.
- New provisions for Canadian sellers per the Retail Payment Activities Act, including segregation of funds and disbursement by Etsy Canada Limited.
- Enhanced actions for invalid or inaccurate tax information may lead to holds or delays.
Seller Impact Analysis:
- You might face more frequent delays or holds on payments, especially if your accounts are linked to others or show compliance issues.
- US sellers should know that Etsy acts as an agent handling payments on their behalf.
- While Canadian sellers’ funds may be held in trust and paid out by Etsy Canada Limited, without earning interest.
- Incorrect tax info, legal issues, or linked accounts could cause funds to be frozen or payment delays.
What to do:
- Review and update tax information and ensure all compliance details are valid.
- Audit business accounts to avoid multiple related shops with incomplete or inaccurate information.
- For Canadian sellers, understand new fund segregation and trust requirements, consult documentation if needed.
- Read and understand the full, updated Etsy Payments Policy before October 2025.
Source: valueaddedresource
CedCommerce POV:
Etsy’s Payment Policy changes mean stricter account holds and stronger compliance controls for sellers starting October 9, 2025. Sellers must proactively manage tax, legal, and identity details to avoid delayed funds. Meanwhile, Canadian sellers should prepare for new fund disbursement procedures.
CedCommerce recommends all Etsy merchants review their account data, and resolve compliance gaps. Additionally, contact support with questions well before policy enforcement.
