PSA Vault Pauses Payouts. What's Next?

PSA Vault, the main consignment service of PSA, has stopped paying customers. Where to go from here is tricky.

PSA Vault, the main consignment service of PSA, hasn’t been paying out customers for their sales for about two weeks. For us, a resell business that sells all cards through PSA Vault, this is obviously highly disruptive. At this point, we haven’t received payouts for 34 cards and are owed over $10,000. We also have another 50 or so cards ready to list that we can’t post until payments resume.

To be clear, I expect this will all resolve itself. At the same time, I never expected the lack of payouts to last this long.

Official PSA Communication

Payouts have been paused for us since January 16th, and communication from PSA has been very limited. The only messaging I’ve seen is this tweet from PSA’s official X account from January 29th:

And this follow-up tweet from January 31st:

PSA highlights purely technical issues in these tweets and says the problems have been fixed. A few days ago, they also added a requirement to upload ID to your Stripe account (Vault’s official payment processor) to continue receiving payments.

However, our Stripe account (and many others based on the PSA Grading subreddit) still gets this error message after uploading identification:

This is concerning because it seems to conflict with PSA’s narrative that there’s a technical issue. To me, that error message seems to conflict with the idea that this is purely technical, although there’s been no communication from PSA suggesting this is the case.

Additionally, PSA has charged us over $3,000 for grading services while holding over $10,000 of our consignment revenue.

Community Theories

There’s widespread speculation in the community about what’s actually happening. PSA offers “partner offers” for graded cards. Essentially, as soon as your cards finish grading, PSA partners make an offer to buy them from you. These are supposedly coming from companies separate from PSA, but the mechanics of these transactions are unclear.

Is Collector’s Universe (PSA’s parent company) the final buyer? Or is it PowerPacks (a joint venture between Collector’s Universe and GameStop)? When these PSA offers are transacted, it’s unclear who ultimately takes possession of the cards.

Further, these offers appear to be algorithmically determined by CardLadder values, which are significantly affected by a card’s most recent transaction. This has led to speculation that certain users manipulated CardLadder values by creating fake transactions, using methods like placing orders then canceling them, or using stolen credit cards. They could then sell their own cards through PSA partner offers for 10-20x their real value.

Again, while this is all just speculation, many people have suggested that this could be the true explanation for the widespread pause in payments.

If someone is taking huge losses on these inflated purchases, I’m unclear if it’s ultimately Collector’s Universe or its partners (though I suspect it’s at least partially Collectors). As a result, I’m getting slightly more concerned as each day passes without payment.

One more (slightly more optimistic) theory is that this is related to the start of the next tax year. Users are reporting they have not received 1099s for their PSA Vault sales, despite crossing the $20K threshold. It’s possible that the payout issues and requests for further identity verification are related to this.

Counterparty Risk

This situation highlights an important point: counterparty risk always exists when doing business with another entity. For example, many people submit cards to PSA through GameStop, which adds another layer of counterparty risk, as you are then exposed to both PSA and GameStop.

This is an important concept to think about in any business, and extends far beyond this business or this specific situation.

In general, when you do business with someone else, you take the risk that the business fails and doesn’t pay you, or acts badly in some other way. We aim to reduce that risk, but this business is basically impossible to run without having eBay and PSA as counterparties.

While I’m still not overly concerned, this feels like a riskier proposition today than it did two weeks ago.

How We’re Handling This

For now, we’re taking down all listings and pausing new buying. While I think it’s very possible that this is resolved by the beginning of next week, it’s hard to say for sure. I’ll continue to wait and hope for the best, but more transparency and communication from PSA would go a long way.

Update: For those reading this now, payouts have been restored back to normal.