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PayPal is making quite a few changes to their user policy moving forward. As one would come to expect, these changes will affect sellers accepting online payments in a rather negative way. Buyers will also pay a bit more money to use the service moving forward. All things considered, these changes will make this service seem far less appealing, that much is certain.
Sending money around the world with existing payment solutions is not a cheap business by any means. PayPal is the market leader when it comes to online and digital payments, albeit their popularity may take a significant hit moving forward. A lot of changes have been announced regarding the company’s use policy, most of which pertain to additional fees and charges to transactions.
First of all, the currency exchange fee will be increased from 2.5% to 3.0%. PayPal users need to keep in mind this percentage will be charged on top of the existing bank exchange rate costs, making international money transfers ridiculously expensive. It does not matter which payment method one uses to fund a transaction, or which foreign currency may be involved. International users may want to pay special attention to this change, as PayPal is effectively limiting their purchasing power.
These Things May Make You Rethink Using PayPal
Secondly, standard transaction fees for sales made to buyers outside the US will increase to 4.4%, up from 3.9%. This includes both physical and digital sales, making it less appealing for US-based PayPal users to explore international markets. As these payments become more expensive to handle, making a profit becomes a lot more difficult all of a sudden. Not a positive development by any means.
Nonprofits who rely on PayPal for international payments may want to rethink their strategy as well. Rather than the tier-based fee structure the company has in place right now, the company will shift to a flat 3.7% fee for all transfers. That means this service is no longer a suitable payment method for US nonprofits looking to accept international payments in a convenient manner. A very disturbing development, as this will hurt smaller nonprofits a lot more than larger entities.
To make matters even worse, the company will no longer offer Seller Protection for donations and financial products. Additionally, users will be able to see a negative balance once the company reverses a payment to eBay cover buyer protection claims. Plus, the company will now enforce suspensions of accounts even more strict than before. In a way, the company is doing everything but clearly steer away users of its platform.
When looking at all of the changes combined – which go into effect on March 29 – it is evident PayPal becomes a far less appealing payment solution. All of the things the company is changing make bitcoin seem like a far superior option. Users who do not agree to these new terms are given the chance to close their account before the March 29 deadline. It will be interesting to see how many people opt to do so.
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