In an email to users last week, Venmo informed its customers that starting July 20, "users who receive payments that are identified by senders as for goods and services will be charged a seller transaction fee of 1.9% + $0.10." Such transactions have thus far been free on Venmo except for credit card transactions, which carry a 3% charge on the service.
The company further informed users that its current fees for instant transfers to bank accounts would also be going up soon. Starting Aug. 2, the charge for an instant transfer estimated to take 30 minutes or less will be 1.5% with a minimum fee of $0.25, and a maximum of $15. The current instant transfer fees are at 1% with a $10 maximum. However, slow transfers, which typically take around one to three business days, will remain free on the app.
PayPal explained in a press release that the new ability for users to tag items as "goods and services" on Venmo means those transactions will also be covered by Venmo's Purchase Protection Program. Fees are paid by the seller.
Meanwhile, PayPal itself is hiking its own customer and merchant fees come Aug. 2, when the payment giant will charge 3.49% plus another $0.49 on most transactions. That is up from the current standard fees of 2.9% plus $0.30.
Fast Company's Arianne Cohen pointed out that competitors Apple Pay and Google Pay do not charge transaction fees.