PayPal will soon help you fund your ecommerce purchases using cryptocurrency, announcing a new service on Wednesday and referring awkwardly to “digital representations of value.”
“PayPal Holdings, Inc. (NASDAQ: PYPL) today announced the launch of a new service enabling its customers to buy, hold and sell cryptocurrency directly from their PayPal account, and signaled its plans to significantly increase cryptocurrency’s utility by making it available as a funding source for purchases at its 26 million merchants worldwide.”
There will be no service fees when buying or selling cryptocurrency through December 31, 2020, and there will be no fees for holding cryptocurrency in a PayPal account. The capability to fund purchases from PayPal merchants will be in place in early 2021.
The BBC reported that PayPal would convert cryptocurrency into the relevant national currency “so the company being paid will never receive the virtual coins – just the correct amount of pounds or dollars.”
While PayPal may help it become more mainstream, cryptocurrency remains uncharted territory with risk and uncertainty, something PayPal addressed when it wrote the following:
“As part of this offering, PayPal will provide accountholders with educational content to help them understand the cryptocurrency ecosystem, the risks and opportunities related to investing in cryptocurrency, and information on blockchain technology.”
BBC called cryptocurrencies a niche payment method, partly due to the “rapid change in prices they can experience compared with traditional state-backed currencies.”
PayPal CEO Dan Schulman called the shift to digital forms of currencies “inevitable,” while citing what he called some clear advantages:
- financial inclusion and access;
- efficiency, speed and resilience of the payments system;
- and the ability for governments to disburse funds to citizens quickly.
He also made it clear PayPal would work with regulators.
“Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange,” Schulman wrote in Wednesday’s announcement.
“We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.”
PayPal noted investments its venture arm made last year in TRM Labs, a company focused on helping financial institutions prevent cryptocurrency fraud and financial crime, and Cambridge Blockchain, a blockchain-based identity management and compliance software company.
PayPal also provided the following details:
“To increase consumer understanding and adoption of cryptocurrency, the company is introducing the ability to buy, hold and sell select cryptocurrencies, initially featuring Bitcoin, Ethereum, Bitcoin Cash and Litecoin, directly within the PayPal digital wallet. The service will be available to PayPal accountholders in the U.S. in the coming weeks. The company plans to expand the features to Venmo and select international markets in the first half of 2021. The service is enabled in the U.S. through a partnership with Paxos Trust Company, a regulated provider of cryptocurrency products and services.”
See the full announcement on the PayPal corporate website.