In today’s headlines on our DC Forecasts crypto news site, we are talking about PayPal which is a leading payments processor valued at $97 billion and its high percentage-based fees, which seemed to have hit a high in Switzerland making a lot of merchants furious.
The high transaction fee of PayPal has led merchants to explore alternatives such as cryptocurrencies (like Bitcoin) all in order to minimize expenses. For the normal users on PayPal, a transaction of one user to another in the same country is charged at a base fee of 2.9%. However, if the transaction is sent to a user in a different country, the conversion rates often take the fee from 2.9% to over 5%.
It all started when one Switzerland-based merchant shared a screenshot of a transaction covering a payment he received from a buyer with seller protection. The user shared this on a a cryptocurrency-related subreddit (/r/cryptocurrency) where he showed that for a purchase of one deck of crypto playing cards worth 14.9 CHF ($15 USD) PayPal charged a fee of 1.2 CHF which is an 8.12% fee.
Even though the payment is small, on a higher scale this can lead to many expenses for merchants which come atop the wide range of costs of dealing with products and services.
As the Swiss merchant with this issue wrote:
“Now I wished I never used PayPal, got a lot of money stuck for another 3 months (6 total) and they give me no reason at all. After being a customer of theirs for 6 years one day they decided nope were gonna hold your money, ban you from our service.”
Currently, the infrastructure around digital assets must strengthen with companies such as ICE and Bakkt building services around it. Only this way merchants can start integrating cryptocurrencies as an alternative to payment processors.
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