PayPal has always positioned itself as "new money", but it has always been so expensive by the time the flat fee and percentage has been calculated. For example in a repeat transaction of £180 made through PayPal I was generally receiving somewhere in the region of £171 or to put it another way 95% of the fee with PayPal taking the other 5%. Furthermore, I was using PayPal as a cross-border means of accepting payments as a convenient work around for different currencies. Yes, it took the heavy lifting out of the process so I wasn't having to deal with multiple currencies, but the exchange rates that PayPal use are so poor that you would think they were working at an airport.
More recent advertising has shown that PayPal are now heavily pushing a rewards programme, which at the very least has been updated from previously with the new rules coming into effect from the beginning of August this year. Sceptical from previous dealings with them, I have found myself asking the question as to whether it is worth it.
What the new rewards programme has effectively done is made a shift from a cashback system to one that is a greater reflection of what could be termed “store credit.” - that being loyalty points rewarded for spending in store, but only spendable within the same store. This means that any reward funds are locked into PayPal’s ecosystem and cannot be used elsewhere. This might work if you regularly pay with PayPal anyway but if you value cash, flexibility, or predictable redemption value, the new programme is objectively worse than before. The previous cashback system enabled the user to redeem points for cash either directly to your PayPal balance or alternatively to your bank account, debit card, or even your PayPal Savings.
Over all this represents a negative step and even a downgrade because in the previous system cashback was universal and stable, but now any accured store credit is controlled by PayPal and can change at any time and with it only being utilisable with "eligible"sellers it means that its redemption availability is inconsistent across merchants.
It might work for a user who already uses PayPal for most online purchases who at the same time doesn't care about cashback and are fine with discount‑style redemptions and want to stack PayPal+ (UK) or PayPal Rewards (global) with other card rewards. It would also work for those who use the PayPal debit card (UK PayPal+) which earns 10 points per £10, effectively 1–1.2% back, rising to 1.5% on food shopping.
But on the whole, and I believe most of us fall into this catergory, it is not worth it if the user prefers cash, bank deposits, or crypto redemptions and want to take advantage of the stability of a predictable value that PayPal can now change at will with it being pased on "point" value. It is also pretty pointless if a user rarely uses PayPal checkout and can't be bothered to manually opt in. This will be required from June 29, 2026 and is almost certainly related to data processing and GDPR regulations.
Overall, and looking at it from a big picture perspective, it is all about PayPal wanting more control over its "currency" by making it internal. PayPal are putting themselves 100% in the driving seat by deciding where you can redeem and at what value. We must also be aware that PayPal can change the rules at any time.
So, all in all, it really is not worth it ans primarily because of its switch to an internal facing approach. The user must remember that at all times no PayPal rewards can leave the PayPal ecosystem - and if that is not control then I don't know what is - and that is gives YOU (the user) much less flexibility and control and especially in the light of the fact that it is only redeemable (in the form of a discount) along certain channels.
My base conclusion is simply this, if it doesn't offer real benefits to the user, then it is a scam, a con to entice more users under false pretences even though PayPal are not doing anything illegal.
As always stay safe and well my friends.
