PayPal and Venmo are increasing their instant transfer fees for consumers and merchants in the United States in the coming weeks, PayPal announced Thursday. Instant transfers allow customers to transfer their money instantly to a bank account or debit card for a fee.
For personal accounts on PayPal and consumer and business profiles on Venmo, users will pay 1.75% of the transfer amount, with a minimum fee of $0.25 and a maximum fee of $25. Prior to this change, the instant transfer price for personal accounts on PayPal and consumer and business profiles on Venmo was 1.5% of the transfer amount, with a minimum fee of $0.25 and a maximum fee of $15.
For PayPal merchant accounts, the company is maintaining the existing rate of 1.5% of the transfer amount, raising the minimum fee from $0.25 to $0.50, and removing the existing cap of $15 in place of a new ceiling structure with no maximum charge.
The new price change will take effect on May 23 for Venmo customers and June 17 for PayPal customers. In a blog post about the announcement, PayPal said it was changing pricing “to be more in line with the value we provide.”
For people using PayPal and Venmo as a way to quickly process large payments or get some much-needed cash into their accounts, the new changes will incur more fees. The standard bank transfer feature on PayPal and Venmo is always free, but usually arrives 1-3 business days after the transfer is requested.
PayPal and Venmo first announced their instant transfer features in 2017. Although PayPal had been in the peer-to-peer payments industry for almost two decades, the company had been challenged by a number of new comers whose main benefit was the ability to “cash out” to your bank account instantly, which led PayPal to implement its own version of the feature.