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Is PayPal’s 8 Percent Transaction Fee Making Switzerland Merchants to Migrate to Crypto Services?

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The giant payment platform PayPal which is worth more than 97 Billion dollars, subjects its customer- merchants to two fees- percentage based fee which is topped with the base transaction fee of 2.9 percent. The transactions that are made within the user’s country is subjected to a 2.9 percent fee whereas, if the transaction is made between two countries, the fee is subjected to the conversion rates. This often results in a hike from 2.9 percent to even 5 percent in the transaction fee.

When it comes to merchants, the same fee can touch a high percentage that can vary anywhere from 8 to 10 percent, which is subjected to the country from which the merchant is operating.

As per the reports from Reddit, a merchant from Switzerland shared how the 8 percent fee from PayPal has forced his income to get locked in for good three months. The merchant shared a screenshot of his PayPal transaction that elaborates the details of the payment made under seller protection policy. The screenshot describes how the merchant had to pay 1.21 franc (8.12 percent fee) on an item sold for 14.9 francs (CHF).

This nominal looking percent fee becomes quite a considerable amount when the sales are in large numbers. The merchants’ pockets are further challenged when they have to deal with covering manufacturing costs, taxes, transportation costs, rentals, and other related fees; which poses a serious problem for especially small-scale merchants.

If this was not enough, another aspect called ‘seller protection’ also become a hindrance for the merchants from time to time. As per ‘seller protection’ policy from time to time, payments become inaccessible for the merchants for three months. This is done keeping in mind that the buyer may want to request a refund. The combination of high transaction fee and the ‘seller protection’ policy poses serious trouble for merchants who depend on the revenue generated from the immediate selling of their goods and services. Stuck in such a situation, the Swiss merchant said-

“But now I wished I never used PayPal, got a lot of money stuck for another three months (6 total) and they give me no reason at all. After being a customer of theirs for six years one day they decide nope we are gonna hold your money, ban you from our service.”

This kind of trouble is compelling merchants to seek out alternative trading platforms such as crypto. Crypto market with its famous and infamous volatile nature has not been successful in pulling in merchants’ community as they seek stability. But with the changing time, and the growth of the digital currency, regulation in the crypto world, more and more crypto exchanges offering better stability; the scenario is changing gradually. Giants such as ICE and Bakkt moving into the crypto industry and offering a good range of services is a sure sign of confidence and stability of the digital currency trading. This could result in merchants to migrate to crypto transactions as an alternative route to minimize their expenses. The reported Swizz merchant has already joined hands with a cryptocurrency payment platform and linked it with an e-commerce website to see how much benefits this digital currency platform has in store for him.

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