Online payment service provider PayPal Holdings Inc. (PYPL) has overhauled its rates for its clients in the United States. The company will be lifting its merchant costs for branded products while reducing costs for processing of Visa Inc. (V) and Mastercard Inc. (MA) transactions.
“We are changing prices to help our customers understand even more clearly where we provide value. The wallet is of tremendous value, the card processing is commoditized,” said the company’s senior vice president for small and medium businesses, Dan Leberman.
In addition, PayPal says it will be charging sellers 3.49% plus 49 cents to process transactions made through its proprietary products including its button on its digital wallet and merchant websites.
This move comes as a very bold one considering how the online payment space in increasingly becoming competitive with each new passing day. This strategic overhaul clearly reflects the company’s increasing market share of online transactions courtesy of the pandemic.
The pandemic resulted to lockdowns and movements restrictions around the world, a situation which led to increased online payments as businesses and institutions flocked the online payment sector.
As of the end of last year, PayPal had its active accounts totaling up to 377 million, a number which is more than double what the company had back in 2015. The company said this increase reflects the value of proprietary services.