Paypal is an online payment system with US$40.774 billion in assets and 244 million users.
Through Paypal, any purchase made in the U.S. is free. When selling in the U.S., you pay 2.9% + $0.30 per transaction. Logically, the fee increases when selling is done in international markets. It goes on to 4.4% transaction fee plus a fixed fee based on currency received.
For a tradesman, the fee can exceed the range of 8 to 10 percent depending on the country the user they are selling to is located in.
A redditor pointed out to the world how Paypal was charging around 8% per transaction — alot more than what it should be.
The transaction fee comes out to be 8.12%. You have to pay 8.12% fee on a set of playing cards. The redditor appealed to the people who ‘this (mention to picture) is why we need crypto’.
Sellers have to deal with instances like this alot. A wide range of costs that includes cost of manufacturing are endured by the seller. An 8.12 percent fee deduction cuts away the seller’s profits in chunks.
To add to the hurt, seller protection, a common tools on online payment sites, locks certain payments received by merchants for 90-180 days, disallowing sellers from withdrawing the money sent by buyers for in case the buyer wants a refund.
This may sound cool on the buyer end but on the seller end, it causes problems. Small craftsmen that have to pay urgent money to keep moving the wheel are struck hard.
The next real question is: Can crypto do anything to help the people get rid of these giants?
The answer is: Probably not.
Like a user pointed out on the reddit thread:
‘Crypto will never succeed as a payment method because it doesn’t offer any kind of security or guarantee to the customer. What’s up when the customer wants a refund, and the seller doesn’t want to give it to him? Money. Gone. Can’t file a complain. Can’t chargeback.’
With crypto adoption still in progress, fighting their own battles, it looks like the traders have to either move away from these sharks or move towards other alternatives that cost less.
Unless crypto evolves a buyer protection, the e-commerce slot will remain empty for the fiat currency e-commerce companies to take over.