PayPal recently announced that users will soon be able to “instantly” transfer money between its services and their bank accounts, as long as they pay a 25-cent fee per transaction. The move, according to the company, is still in beta for select users and will in the future roll out for eligible Visa or Mastercard debit card holders.
Typically, transactions take a day or two when using PayPal or its peer-to-peer service Venmo. With the new feature, users will be able to choose between these regular transfers, and instant transfers that will allow them to receive their money in “a matter of minutes”, with transactions possibly taking as much as 30 minutes in some cases, according to PayPal.
The move is reportedly an answer to various up-and-coming competitors who offer similar options. Square Cash, for example, allows users to instantly transfer money into their bank accounts, but charges a 1% fee, meaning PayPal allows customers to save on large transfers.
Zelle, another Venmo competitor, is already backed by over 30 U.S. banks, and hasn’t even gone live yet. It promises instant transfers through the banks’ websites and apps, as well as in its standalone app as well. According to reports, Zelle is going to offer cheaper fees, but PayPal has its benefits. According to PayPal’s COO Bill Ready:
What our customers value is that they know that not only can they use us as a pay anyone service, so – no matter what bank someone banks with or what operating system they’re on – they can easily exchange money with the person on the other end. But along with ubiquity that PayPal provides, we’re offering great protections – the buyer and seller protections are things that have been differentiated in the market for years,
Zelle is built on the clearXchange Network, which saw over $16 billion being transacted in Q1 this year. PayPal’s combined services – PayPal, Venmo and Xoom – processed $64 billion in transactions during the same period.
In the past, PayPal has been a Visa and Mastercard competitor that encouraged customers to link their bank accounts to its platform to bypass large networks. Recently, however, the company seems to have shifted its strategy, TechCrunch notes, as it unveiled partnerships with both Visa and MasterCard last year. The new feature comes partly as a result of these partnerships.
At first glance, these look like horrible news for bitcoiners who, lately, have seen nothing but increasing fees and large numbers of unconfirmed transactions. Recommended transaction fees are now well over the $2 mark, and even though the number of unconfirmed bitcoin transactions is significantly lower than the 200,000 seen last month, the number is still pretty high at 33,000, according to Blockchain.info.
Bitcoin’s seemingly endless scaling debate might finally be over now. As reported by CCN.com, SegWit2x recently hit the 80% network hashrate threshold it needed. When it comes to fees and transaction times, PayPal’s instant transfers might now be better than bitcoin, at least until the cryptocurrency’s problems are solved.
Still, for those who worry about their privacy and want to control their own money there are plenty of alternatives. Dogecoin, for example, is viable altcoin. Although it might be hard to directly spend dogecoins, the cryptocurrency still has relatively insignificant transaction fees, as well as fast confirmation times.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:43 AM UTC