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PayPal recently announced that it would retain all the seller's fees when processing a refund. Would such a policy interest online merchants in alternative payment networks, such as Bitcoin and other cryptocurrencies?
In addition to adjusting sales charges, PayPal also announced that it would change the way it handles intentional payments. Transferring funds from one country to another resulted in fixed costs, but would cost a percentage of the total amount transferred. Obviously, any encryption can beat these international transaction fees by more than an insignificant amount.
Could the wrath of PayPal users benefit Crypto?
According to a report in TechSpot, PayPal has angered many of its loyal users with the latest changes to its terms and conditions. Previously, the company charged the seller a lump sum of 30 cents for each network retail transaction and 2.9% of the value of the good or service sold. If the buyer requested a refund for any reason, the fees would be retained by PayPal, while the percentage would be refunded to the seller.
In its latest policy revision, dated May 7, 2019, the International Payments Processing Company has now planned to keep both the charge and the percentage of the value of the item when a refund is requested. This essentially amounts to charging a seller to the customer who changes his mind about a purchase.
The report published in TechSpot highlights the unfairness of the change with an example in which a seller has to repay a purchase of $ 1,000 at a cost of $ 29 for himself.
Examples such as the recent wrath of PayPal users could possibly provide an opportunity for Bitcoin and other cryptos. Essentially, PayPal justifies the consideration of its costs by the cost of trust established between two parties. They act as mediators between two individuals or companies who may not know each other and can charge what they want for the service.
Bitcoin and other cryptos do not rely on a central authority to mediate. This role is distributed among all network minors and, therefore, no party can put pressure on network users, unlike PayPal.
International payments also include fees with PayPal
PayPal also derives money from its users when they send money from one country to another. The company charged a flat fee for this service. However, with the latest changes to the terms, he announced that he would now charge a 5% variable fee. Intentional transaction fees will not exceed $ 4.99 and not less than 99 cents.
Because fees are capped, those who send small sums of money are punished with severe fines of five percent or more, while those who send huge sums pay less than $ 5. The real impact is that the poorest people pay the most.
Compare that with cryptocurrency. Crypto like Bitcoin does not care about the imaginary lines it has to cross to reach its destination. Sending Bitcoin, Ether, Dash or Litecoin to your friend sitting next to you or at the farthest point in the world costs exactly the same. As these payment networks continue to evolve, it is likely that the extremely tight fee structures imposed by PayPal will no longer be a problem.
Similarly, crypto can not retain services to individuals in the same way that PayPal can and has done before. Bitcoin is totally without permission and resists censorship, which means no one can stop anyone from using it.
Related reading: Bitcoin exceeds PayPal in annual transaction volume to $ 1.3 trillion
Featured images of Shutterstock.
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