PayPal’s Ridiculous Conversion Rates are Pushing Customers Over the Edge – CCN.com
Since the arrival of cryptocurrencies onto the global finance stage, PayPal’s (PYPL) general market perception seems to have changed quite radically.
This is perhaps best highlighted by the fact that the company’s stock fell to its lowest levels since early 2018 after the firm released second-quarter results a couple of months back.
To be a bit more specific, we can see that during April this year, PayPal’s executive brass forecast annual revenue growth of around 16%–17% for the company. However, within just 90 days of releasing their report, the firm changed its tune and brought down its annual growth target close to the 14% mark.
Additionally, it bears mentioning that a number of users of the premier payments platform have recently taken to the company’s community page to express their grievances regarding the firm’s use of incorrect exchange rates to facilitate their international (as well as cross-currency) transactions.
In this regard, a screenshot from PayPal’s community portal started to do the rounds across various social media websites last week. The image shows PayPal providing one of its users with an exchange rate of 0.87462 EUR per US dollar — when, at the same time, the official rate on Google stood at 0.91 EUR (per dollar).
The payments market has been flooded with a number of companies (i.e., Apple Pay, Stripe, Shopify and Payoneer) that are providing customers with fee rates that are at par, if not better, than what PayPal is offering right now.
For example, Square, a California-based firm headed by Jack Dorsey, offers its users free access to its platform, whereas PayPal Pro charges its users a flat $30 monthly fee. Secondly, the Square Cash platform comes pre-built with certain features that seem to be missing from PayPal — for example, Square provides its clients with free use of its virtual terminal and recurring invoice features.
Crypto vs PayPal
On paper, this debate seems to favor crypto quite heavily, primarily because this novel asset class minimizes many of the processing charges/fees that are inherent with centralized financial platforms such as Paypal, Amazon Pay, WePay, etc.
However, owing to the volatility of this burgeoning sector, a lot of people are still a little hesitant to use cryptocurrencies like bitcoin or Ethereum for their everyday payments and monetary transactions. Additionally, a lot of people tend to view bitcoin as a long term Store of Value (SOV) rather than an everyday transaction medium — as a result of which, they avoid using the flagship crypto-coin for remittance purposes.
Last but not least, it is worth pointing out that for the second time since its inception, Bitcoin’s annual transaction volume surpassed that of PayPal’s. To be a bit more specific, in 2018, users all over the world facilitated monetary transactions worth $3.4 trillion using BTC — a number that completely overshadows PayPal’s associated figure of $57 billion. However, Visa still leads the roost with an annual transaction volume of $11.2 trillion, while Mastercard trails in second place with $5.9 trillion.
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