This is all new since I stopped selling. This arrangement applies to those who use eBay managed payments, other than receiving directly to your PP account. I get it. Then, the PP fees are included in the expenses deducted by eBay, so you have no direct sales relationship with PP. Interesting. (I used to wait until it was enough to request a check from PP).
Is eBay management an option or required? I wonder what percentage use which.
But, with the eBay management of payments, you are correct that PP would be a pass-through, and wouldn't include those in any 1099 PP issued.
And that’s why eBay asks the social security number of any seller that hasn’t sold stuff in a while; this happened to a relative of mine- they got an email from eBay saying that they (the relative) had to call eBay and update their account.
If you want to sell on eBay, you have to use their managed payment system. It’s mandatory.
In some respects, it’s an improvement as eBAy gives you a single monthly figure representing all the expenses of selling. That includes listing fees, final value fees, shipping labels, nuisance fees, and the transaction fees (which used to be taken by PayPal). Record keeping is considerably easier. 2021 was messy as the new system was gradually phased in, but now in 2022 its fully operational and is working reasonably well.
Many people griped that now you don’t have immediate access to your money which previously would have accumulated in your PayPal account with which you could make purchases or pay bills. You now have to have a bank account linked to eBay (most people have a separate account for that). Money is periodically swept out to your bank account with several schedule options (daily to monthly). This could be a problem for people on the verge of insolvency.