Why PayPal Raised Its Processing Fees -- and Why It Could Backfire
PayPal (NASDAQ: PYPL) just announced that it will raise its processing fees for U.S. merchants. Starting on Aug. 2, the rate for each online PayPal or Venmo transaction will rise to 3.49% plus $0.49 -- compared to its current rate of 2.9% plus $0.30 for most online transactions. PayPal's stock rallied after the announcement, and several analysts lauded the decision as a sign of its pricing power.