New PayPal Fee Structure Gives Mantle to Cryptocurrency for International Payments

PayPal's new charges and fees

PayPal has brought in a flat fee structure on April 19 which makes small international payments for US citizens a lot more expensive than using cryptocurrency.

The new structure is a flat fee of $2.99 for transactions to Canada or Europe and $4.99 for any other international transaction. This means a payment to someone in Japan of $10 would result in an almost 50% fee. Further fees are added if the money comes from a credit card, debit card, or PayPal credit which results in an additional 2.9% of the transaction amount and a fixed fee based on the currency.

In contrast, Ripple is a blockchain based company who is aiming to compete with SWIFT, the global leader in international payments. Currently, the average fee for using their cryptocurrency XRP is 0.007 XRP ($0.006) and the highest this has been is 0.02 XRP ($0.02). Alternatively NANO (NANO) is a feeless cryptocurrency that offers near instantaneous transactions and only burns a tiny amount of each transaction to avoid someone spamming the network.

However, there can be other costs involved in cryptocurrencies such as using Coinbase to buy a cryptocurrency in the first place, trading fees for exchanging them and losing money from scams, hacks and mistakes. At present, PayPal is more user friendly and does not have complicated public and private keys, instead using email addresses for transactions.

Other changes to the PayPal user agreement include: "Clarifying that Sellers have certain obligations under applicable law around how they collect, store and protect user data of customers in Europe." This will be in response to the upcoming General Data Protection Regulation which will be enforced effective May 25th and requires companies that hold data on citizens of the European Union to submit to certain rules and regulations that will protect customer data.