PayPal’s New Fee Structure Emphasizes Need for Bitcoin and Crypto
PayPal, an American company that provides online payment services across the world, in recent times stated that it will maintain the overall seller’s fees, at the time of processing a refund going forward. Now the question is whether such kind of self-serving policy will force the online merchants to make use of other payment networks like Bitcoin and other cryptocurrencies?
Besides, the adjustments made to the seller fee, PayPal has even mentioned that it will change the way it manages intentional payments. Exchanging funds from one country to another used to have a fixed amount of fee. By now, it will only cost a percentage of the total value transferred. Now it’s clear that any cryptocurrency can defeat this international transaction fee by greater than a small amount.
PayPal’s Decision: will it Benefit Crypto?
According to a report, PayPal has angered several of its reliable users due to the recent modifications to its terms and conditions. Earlier, the PayPal Company used to take a fixed fee of around 30c from the seller in every retail transaction, apart from this it used to take 2.9 percent of the amount of the goods or services sold. If in-case, the buyer demands a refund citing any reason, the set fee could be maintained by the PayPal simultaneously the percentage could be paid back to the seller.
Considering the latest amendments to its policies made on 7th May 2019, the worldwide payments processing firms have now made it in order to maintain both the set fee and the percentage of the goods value at the time when asked for a refund. This is basically the same as taxing a seller for customer changing his mind over a purchase.
The report underlines the injustice of the amendments by giving an example in which a seller needs to refund the purchase of worth $1,000, at a price of $29 which is held by them.
PayPal decision would finally offer an opportunity for Bitcoin and Cryptos. PayPal defends its fee by utilizing the amount to secure trust within the two parties. They can behave as an agent between the two parties or companies and may not know each other and charge what they wish to for the service.
Cryptos and Bitcoin do not depend on any central authority to offer intervention. This responsibility is shared across all the miners of the network, and hence no single party can make any kind of request on the user’s network, as PayPal can do whenever it desires to.
PayPal Fees are also Experienced by International Payments
PayPal receives money from its users whenever they transfer money from one nation to another. However, the PayPal firm used to impose a flat fee for this service. Nevertheless, with the latest modifications in the terms and conditions of PayPal, it has announced that it will now be charging a variable fee of 5 percent. The transaction fee will be more than $4.99 and not less than 99c.
The fee is finalized, and anyone sending a small amount of money will be imposed with a heavy fine of 5 percent or more. Those sending large amount needs to pay less than 5 percent. The poor are affected the most by charging more.
PayPal can withhold services to individuals but crypto cannot. Bitcoin is completely licensed and censorship-resistant which means that no one can stop anyone from using it.