Paypal, the parent company of Venmo, recently announced plans to increase their fee for the “instant transfer” service, affecting both of their popular financial applications (Paypal and Venmo).
The service, an “instant transfer”, essentially allows you to transfer some or all of the balance in your Venmo or Paypal account to your bank account or debit card in seconds. Paypal and Venmo already charge for this service, but soon it will be even more!
Thinking ahead of time can save you money here – A standard transfer, through either Paypal or Venmo, remains free, although it generally takes 3 to 5 business days to process and hit your account.
Paypal and Venmo’s current instant transfer fees are 1.5% of the amount transferred, with a 25-cent minimum and a $15 maximum.
The upcoming instant transfer fees are 1.75% of the amount transferred, with a 25-cent minimum, but a new $25 maximum.
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The pricing changes go into effect for Venmo customers on May Twenty-Third, Paypal announced. Paypal customers are next in line, with the increase kicking in on June Seventeenth.
Also, for merchants, we’re briefly touching on your rate changes below:
Once upon a time, Paypal offered a one size fits all, across the board, flat rate fee for processing online transactions. However, on August Second, 2021, everything changed.
Merchants began to pay different per-transaction rates based on a number of different factors. The most contentious part of this change was, and continues to be, an increase from $0.30 to $0.49 on the fixed portion of charged transaction fees (in most cases).
As always, this financial change won’t affect the big players. Sellers with high average tickets, or international conglomerates, for example, will hardly notice a difference.
Also, as always, it will disproportionately affect the “little guys”. Merchants who accept lots of small transactions will now pay substantially more in fees. In particular, web streamers of all shapes and sizes, who commonly receive tips under $5, will really, really notice a difference.
Streamers, or others who use Paypal for tips extensively, would stand to benefit from Paypal’s “Micropayments” plan, in which the fixed portion of the fee is just $0.09. But according to various sources, Paypal is no longer offering the micropayments plan to those who receive donations, which begs the question – “What the F••k, Paypal”?
If you’re a businessperson who’s reliant on Paypal for credit card processing, now may be a good time to investigate some other options. I don’t know which option is your best bet, but these rate increases definitely would make me start shopping around elsewhere.
The Internet Patrol is completely free, and reader-supported. Your tips via CashApp, Venmo, or Paypal are appreciated! Receipts will come from ISIPP.
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