PayPal is making changes to its published rates in the United States to align its pricing better to the value of its products and services, PayPal announced Friday.

The company said its goal is to be transparent and upfront with its customers about the changes. These rates will apply to a portion of PayPal merchant customers in the U.S. beginning August 2, 2021.

It began notifying some customers today, and merchants can find a notice on its Policy Updates page. In addition, here is a brief run-down of the fee adjustments PayPal is making.

  • PayPal Digital Payments: For PayPal payment products (such as PayPal Checkout, Pay with Venmo, PayPal Credit, Pay in 4, PayPal Pay with Rewards, Checkout with crypto), which include Seller Protection on eligible transactions, the rate for online transactions will be 3.49% + $0.491 per transaction.
  • In-person Payments: For PayPal and Venmo QR code transactions over $10, the rate will be 1.90% + $0.10, and for such transactions, $10 and under, the rate will be 2.40% + $0.05. For certain in-person debit and credit transactions, the rate will be 2.29% + $0.09.
  • Credit and Debit Card payments: Online credit and debit card transactions will be 2.59% + $0.491 per transaction without Chargeback Protection, or 2.99% + $0.49 with Chargeback Protection.
  • Charity Transactions: Fees for charity transactions will be 1.99% + $0.49 for confirmed charities (subject to application and pre-approval).
  • Non-standard Pricing: For U.S. merchants who have custom, non-standard pricing, rates will remain unchanged for those services as agreed.
PayPal Digital Payments
Source: PayPal

Why is PayPal Raising Merchant Fees?

As it has been evolving its business alongside its merchant business partners, PayPal has accelerated the rollout of products, features, and capabilities, delivering more benefits than ever before.

With this, PayPal believes it has become more than just a button or payment processor and evolved to a full commerce platform capable of driving growth for businesses of all sizes online or in person.

PayPal says that its merchant customers benefit from the following:

  • Consumers who choose PayPal as a payment method are 60% more likely to convert than consumers who do not choose PayPal as a payment method.
  • Consumers are nearly three times more likely to complete their purchase when PayPal is available at checkout.
  • It recently announced Buy Now, Pay Later solutions have resulted in a 15% lift in payment volume for businesses.

Additionally, PayPal makes the case that it is continuing to partner and invest in its platforms to enhance payment experiences, provide greater choice for the way people pay for goods and services, improve protection and security measures to give people peace of mind when transacting digitally, and improve authorization and conversion rates.

Furthermore, the company says that it continues to innovate rapidly and empowers businesses never to miss a transaction no matter where they do business. By investing in its data analytics capabilities, improving its fraud tools, and new consumer experiences, PayPal believes it delivers extra value with products like Buy Now and Pay Later, Pay with Rewards Points, and Checkout with crypto.

The newly announced fee changes come on the heels of its PayPal Terms and Conditions update that went into effect last week.

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