Making payments online can be done through many different ways. Cryptocurrencies play a growing role of importance in this regard. Taking the crown from the likes of PayPal will not happen overnight. Even so, the latter company is making some policy changes which will not be to everyone’s liking.
The PayPal Policy Changes
Online payment processors need to keep a close eye on their competitors. This also includes making policy changes which may offend a fair few people. For PayPal, their new direction is pretty straightforward. The variable rate pricing for sending money outside of the US is being removed. Instead, recipients of funds will be “discriminated” based on their country of residence. A flat fee is to be introduced, which can ramp up to $4.99 per transaction.
To make matters worse, there is an extra “rule” for credit and debit card users. This same flat fee will apply, plus a fixed fee based on the currency, and a surcharge of 2.9% of the transaction amount. In the best case, sending $100 to a country with a $2.99 flat fee would net the recipient $92 or less. This new scheme will not be to the liking of people who regularly transfer money through the PayPal infrastructure.
It is important to note this does not apply to purchases made through the service. This only pertains to people who send money to friends and family members. Anything labeled as a non-purchase will be subject to this new policy. This makes PayPal a far less favorable option for sending money between friends and family members. Instead, it may push people to alternative solutions.
A Boost for Cryptocurrency?
Up until now, PayPal had made somewhat of an impact in the money transfer industry. Especially where remittances are concerned, the service offers an adequate alternative. These new changes will force people to look for alternatives in this regard. Especially with unverified users being unable to send money and make payments, things are not heading in the right direction.
Other forms of remittance will undoubtedly benefit from these policy changes. The likes of TransferWise are a lot cheaper than PayPal, but still somewhat expensive. Cryptocurrencies can make a positive impact in this regard. Unlike traditional solutions, Bitcoin and consorts are borderless and can be a lot cheaper to send money abroad.
More importantly, cryptocurrency use doesn’t necessarily require a lot of personal information. Setting up a wallet address is a matter of installing the right software. Converting cryptocurrency to fiat currency may involve a KYC procedure, but exchanges are getting better at processing those requests quickly. PayPal may effectively pave the way for broader cryptocurrency adoption in the coming years.