PayPal overhauls U.S. rates as payments rivalry heats up

FILE PHOTO: A payment is made on a mobile device during a PayPal demonstration at Terra Gallery in San Francisco, California May 21, 2015. REUTERS/Robert Galbraith/File Photo

NEW YORK (Reuters) -PayPal Holdings Inc will lift merchant costs for its branded payment products while cutting those for behind-the-scenes processing of some Visa and Mastercard transactions, a bold move in an increasingly competitive digital payments sector.

The strategic shift reflects PayPal's growing power in online transactions, which surged during the COVID-19 pandemic. As consumers and businesses flocked to the company, a market leader, during lockdown, its active accounts mounted to 377 million, more than twice as many as in 2015.