PayPal raises Venmo fee in bid to make profit

NEW YORK: PayPal Holdings Inc increased a Venmo fee as part of a broader push to make money from the fast-growing mobile payment service, prompting backlash from users on social media.

PayPal said it will charge one per cent when Venmo account holders transfer money quickly to their bank accounts, starting November 6.

When the feature was first rolled out, there was a US$0.25 (RM1) fee on the transactions.

Users will still be able to do standard bank transfers for free but those take one to three days.

“The change reflects the value that Venmo’s services offer, providing speed and convenience for customers who want to transfer their funds in 30 minutes or less,” a PayPal spokesman said.

Venmo has been a hit with young, smartphone-wielding consumers, giving PayPal a valuable source of growth and future transaction volume.

But the unit is still unprofitable, and the company has been slowly trying to change that.

Over the summer, Venmo introduced a debit card, giving PayPal a small cut of transactions at retail stores and other merchants.

Venmo users aren’t so enthused by PayPal’s effort to squeeze more money from their transactions, though that was coupled with some confusion over which transfers will and won’t be subject to the new fee.