Paypal may have conceded to cryptos after Ebay ditches them

It has been a slow dawning but it would appear Paypal is fading further into redundancy with an announcement that it will be raising its transaction and credit/debit card fees. It certainly would have been bullish news for the crypto market which has been rallying this week, and most of all Ripple (XRP) which would be the most direct competitor to Paypal.

Meanwhile, Ebay’s share price surged this week on after Morgan Stanley lifted its outlook for the company based on its recent partnership with payment processor Adyen and distancing from its long-time payment partner Paypal. Ebay’s contract with Paypal runs out in 2020 and it may be that Paypal is squeezing the last out of the auction’s transactions with its new fee structure.

Paypal’s share price diverged hugely from Ebay this week and took a sharp dip.

From April 19th the following changes will be implemented:

• Retracted services: We’re no longer going to offer the Pay After Delivery product so we are removing terms related to that product from the user agreement.
• More collateral: We’re clarifying that when purchasing or sending money, we may require a backup payment method for your transaction(s) to be used if the selected payment method is declined, expired or otherwise unavailable.
• Unverified identity restrictions: If we have not verified your identifying information, a balance in your PayPal account can generally only be held in your PayPal account and transferred to a linked bank account or debit card (subscribers will also be limited to one account).
• **Flat fees:**We’re removing the variable rate pricing for sending money to friends and family members who have PayPal accounts in a country other than the United States when you send money using PayPal balance or your bank account and introducing a new flat fee of $2.99 or $4.99 per transaction depending on the recipient’s country.
• Credit and currency fees: However, when you send money using your credit card, debit card, or PayPal credit you will be charged the new flat fee per transaction depending on the recipient’s country + 2.9% of the transaction amount + a fixed fee based on the currency.

The charges at $4.99 will make Paypal transactions more expensive than bitcoin and could drive customers away from the platform which already had a reputation for heavy fees. Ripple had a very bullish crossover with the Paypal price on April 19th  when the changes were announced.