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PayPal hikes prices for merchants in the U.S., shares jump 1.9%


Source: Money | HowStuffWorks

PayPal is a California-based financial services company that provides online payment and financial solutions to its users all across the globe. The eBay-owned company is making some tectonic changes in the markets of the United States. Recently, the payments company has announced to be increasing their published rates in the United States to better align with the value that its products and services provide. This move had caused some shift in PayPal’s dynamic in the share market.

According to a report by Bloomberg, PayPal Holdings Inc. has jumped in share prices after its latest announcement on increasing rates for some of its new products.  The report further mentions that the company is planning to reserve the cut of 3.49% of a transaction’s value in addition to the 49 cents for merchants that use its proprietary services.

The company says that they are making the said changes to the published rates in the United States of America to better align their prices with the value that users get from their products and services. According to the official statement from the company, the announced changes in prices will take effect from August 2, this year.

It is difficult to deny the fact that PayPal has overgrown its basics of being just a tap-on payments processor to becoming a complete commerce platform. Competing head-to-head with companies like Mastercard Inc. and Visa Inc. The financial services company is fully capable of driving new dynamics of growth for businesses.

Nevertheless, the prices have jumped straight from a flat 2.9% of from each transaction’s value, plus 30-cent merchant fee to a whopping 3.49% in addition to 49 cents from merchants that use the company’s proprietary services and products for running their businesses.

As mentioned in a report by Bloomberg, the share market value of PayPal Holdings Inc. jumped 1.9% to USD 283.38 as per the New York Stock Exchange. This figure has been the highest since February this year and it reportedly has also become the third-best performer according to the S&P 500 Information Technology Index.

Furthermore, the company says that with these price changes, the merchants from the United States will pay more to use some of the company’s proprietary services and products which it has spent years developing. PayPal has grown beyond just being a payment processing company, thus, it is leveraging its expertise in the industry to charge more from its merchants and users in the United States.




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