And also the fact that they are one of the few established and widely accepted payment / transfer systems, so their customers aren't going to flee in droves.
C) Or they're seeing more transactions that maybe be fraudulent, or not. And their users (sellers, and perhaps to some extent buyers) are asking such transactions be allowed. The increase is to cover the increase in risk.
Note: Not defending the increase. Only pointing out there's a possible upside for their market. Yes, at a slightly higher price.
It's the prisoner's dilemma.
Merchants using PayPal can't charge more on PayPal transactions so they increase the price of all their items for all customers. For card transactions they pocket the extra profit and likely then use it to pay PayPal fees and refunds. A similar mechanism happens for credit card chargebacks.
All customers pay for this feature.
When given the choice between credit card or PayPal, customers can get PayPal protection or not for the same price. If they use PayPal they perpetuate the story that people prefer PayPal and contribute to generally higher prices to account for PayPal refunds, mostly damaging themselves in the long run (given we already have laws in place that force merchants to refund / return items and most merchants are not scammers) and benefitting PayPal.
It seems like we need a law that requires a credit card processing fee to be shown on the receipt like sales tax. People would then start gravitating to the cheapest processors due to competition being obvious to consumers.
Or it could be just simple profit and the second thing you mentioned.
There's a narrative where companies are painted as regretfully rather than opportunistically raising prices, maybe they just want to make more money. That's kinda the point of the system after all
I blame all the sellers using PayPal's services but not wanting to pay the fees. <RANT>I pay a 3% fee to purchase with my debit card, so sellers need to pay up as well. I'm sick of sellers wanting me to use F&F or cover their PayPal fees. If you have a business that accepts payment through PayPal, or any other payment service, pay the fees!</RANT>
And its getting bigger and bigger by the day, so it should scale. Not increase cost..
I'm pretty sure they do it:
A) for the stock
B) because they are a monopol (almost)