PayPal Turns On Money Tap For Venmo With Fee Increase
PayPal-owned (Nasdaq: PYPL) mobile payment service Venmo is raising its fees for receiving payments in personal accounts from 1.9% + $0.10 to 2.99% beginning July 1, 2024. A move seen as the parent company “flipping the monetization switch for Venmo.”
The excitement has affected at least one major investor. Cathie Wood’s ARK ETFs bought over 100,000 shares of PayPal on Thursday, equivalent to an investment of about $6.2 million. This trade shows Wood has plenty of confidence in PayPal but anyone following Wood’s moves and pronouncements in the last few years would be a little worried for the digital payments giant.
Payment stocks are falling
While PayPal stock is up year-to-date, it’s only by a tiny 0.20%, and it has fallen over 5% in the last month. The decline, which is also true for other payment companies like Affirm (Nasdaq: AFRM) and Block (NYSE: SQ), has been attributed to a recent rule issued by the Consumer Financial Protection Bureau (CFPB).
The new rule classifies “buy now, pay later” lenders as credit card providers, and therefore “must provide consumers some key legal protections and rights that apply to conventional credit cards,” which according to the CFPB includes “a right to dispute charges and demand a refund from the lender after returning a product purchased with a Buy Now, Pay Later loan.”
Information for this story was found via MarketWatch, Barrons, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
