It appears the new regime is specifically designed to make smaller crypto transactions more expensive. A $10 buy will soon cost twice as much as it did before.
PayPal and Venmo have announced that they plan to increase the fees it charges on small crypto transactions.
All of this is going to change from March 21, when Venmo moves to a flat dollar fee instead.
Who Will This Affect?
Venmo — and its parent company PayPal — have become popular outlets for those looking to dip their toe into the world of cryptocurrencies.
But both platforms only have a limited repertoire of digital assets available: Bitcoin, Ether, Litecoin and Bitcoin Cash.
Crypto-focused exchanges tend to have a greater selection of coins on offer, a broader range of features, and more competitive fees. But they tend to fall down when it comes to usability, making Venmo and PayPal more of a convenient option for those who are unfamiliar with how digital assets work.
In a statement, a PayPal spokesperson said:
"This change is part of our ongoing commitment to provide transparency, ease of understanding and clarity to our customers."
Transaction fees tend to vary wildly between rival platforms — and sometimes within a company itself. The retail-facing Coinbase app tends to be more expensive to use than the more technically minded Coinbase Pro, for example.
Some analysts have warned that Coinbase's business model could be undermined in the months and years ahead as trading platforms embark on a "race to the bottom" when it comes to fees — with newer entrants such as Robinhood declaring that they don't take a commission. All of this has prompted Coinbase to start seeking alternative forms of revenue.