The recent policy amendment announced by PayPal has sent shock waves across its customer segments who are feeling infuriated by changes. According to the new rules, the international money transfer giant will be keeping the total fee of the seller if the customer request processing of the refund. Many experts believe that this kind of irrational decision which has been taken in the self-interest of the company will have long term effect on its revenue and more importantly, could open the door of opportunities for the cryptocurrencies including Bitcoin.
Until now, the company would charge 30c on each transaction made by the seller on its network along with 2.9% of the total value of goods/services sold by the retailer. In case buyer of the products or services request for a refund, PayPal would keep a set fee while returning percentage to the seller of the product or services. But now according to new rules, the company has announced that it will keep both set fee and percentage in case a refund is requested by the buyer. This rule change has made even the loyal retailers transacting on PayPal angry with many started to look at alternative payment systems like cryptocurrencies. PayPal has justified its move by stating that this extra cost will help it to ensure trust between the transacting parties though the argument doesn’t seem to have found favor with its customers.
International Payment Transaction Fee
PayPal has also revised its international payment service rates. Initially, the company used to charge a fixed fee for the service, but now it has come with the variable component of 5% also. This translates into a transactional fee between 99c and $4.99 for any kind of international payment service. This capping of the fee has been an issue for the customers especially for ones who do transactions involving a small amount of money. The new policy will be penalizing these people the most. Further, experts believe that poor people are going to get most affected by this while rich stands to gain from revised rates.
There is no such issue with the cryptocurrency as sending the money digitally to your neighbor or your friend sitting across the continents cost the same. There is nothing like the imaginary lines which are going to define how much you need to pay in terms of availing international payment services just like the case of PayPal. With the increasing dominance of the cryptocurrency across the globe, it would be very hard for companies like PayPal to continue to charge these kinds of abnormally high fees from the people for availing their services. Another advantage associated with cryptocurrencies is their permissionless structure. There is no mediator involved in case of transactions related to digital coins so one need not be worried about censorship or asking permission from anybody else for using the service.