Earlier this week, Venmo and its parent company PayPal Holdings Inc. notified its users that it was restructuring crypto fees for payments under $200. The company said that it targets to increase the transparency of transactions. However, a closer look suggests that investors making transactions under $130 will be affected by higher fees.
PayPal Restructures the Fees for Crypto Transactions Under $200
Earlier this week, PayPal Holdings and its subsidiary Venmo announced that they would be restructuring crypto fees for transactions below $200. They have already provided the new rates with investors making transactions under $130 facing higher rates.
Last year, PayPal began offering its users trading and holding services for four cryptos(BTC, LTC, ETH, and BCH). Since then, Venmo wallet has served 18% of the global market of active wallets with payment features. That statistic makes it the third most utilized site falling behind PayPal, the leader.
Per the report, Venmo is aiming to capture business through offering convenient services. They give existing customers who want to explore the crypto space a chance to get in. That service saves the existing customers the trouble of opening a new trading account to hold the digital assets.
How the New PayPal Fees Will Look Like
Currently, Venmo and PayPal charge 50 cents for all trades below $25. 2.3% for trades between $25 and $100 and 2% for trades ranging between $100 and $200. The new rates will be effective beginning March 21.
The company will now charge 99 cents for trades between $5 and $25, $1.99 for trades between $25 and $75. And $2.49 for trades between $75 and $200. When converted to percentages, the rates between $130 to $200 will be lower. However, transactions below $130 will be more expensive.
The new rates will relieve large transactions but will hit smaller trades harder. A $50 transaction will now require a fee of $1,99 instead of the previous $1.15. That is an increase of 70%, while trade of $25 will cost $1.99 instead of 50 cents. That is an increase of 243%.
Even though many crypto platforms’ average trade-in is around $250, many other traders complete transactions below that. It may get hard to find traders conducting small transactions using Venmo and PayPal as exchanges have better rates. In addition to the high costs, many still prefer exchange sites to payment apps due to a wider range of assets.
Crypto Adoption in Digital Payments Continues to Increase
Currently, digital payment platforms are on the frontline of crypto adoption. Most traditional payment companies like Mastercard, Visa, Block, and PayPal are figuring out how to adopt cryptos. Others like Block, previously Square are planning to capitalize fully on cryptos.
For some months, Mastercard and Visa have been striking mega deals with crypto platforms to enable fiat to crypto transactions. Block is also planning to begin an open BTC mining platform and make BTC the main focus in its road map. Other payment services providers like banks are exploring how to incorporate blockchain technology in their systems.
These developments are encouraging since they increase the exposure of investors to cryptos.
Source: https://crypto.news/paypal-new-fees-crypto-transactions-below-200/