PayPal Decides to Accept Bitcoin (BTC) for Merchant Payments
The decision by PayPal to allow its over 300 million consumers and merchants in 200 markets around the world to accept Bitcoin payments is a game-changer that could send the digital currency from its current $58,000 to over $100,000 in the next few months.
Online payments giant PayPal (PYPL) announcement that it will allow users to pay for products and services with Bitcoin (BTC); and other leading cryptocurrencies upon checkout with various vendors is a major turning point and validation of digital currencies potential.
PayPal announced in October 2020 it was planning to offer increased support for crypto-assets and roll out gradually. PayPal’s CEO, Dan Schulman, was quoted as saying PayPal is “eager to work with central banks and regulators around the world” to support the universal acceptance of the widely used digital currency.
The first phase of the PayPal plan was implemented for consumers using PayPal in November by adding functions in customers’ accounts like a cryptocurrency wallet. Access to an exchange that allows the conversion of U.S. dollars to cryptocurrencies and visa-versa.
The addition of the cryptocurrency wallet and cryptocurrency exchange to PayPal’s customer accounts will now allow the direct purchase of all sorts of assets, consumer goods and services on an everyday basis with digital fiat currencies like Bitcoin
At the end of March 2021, Paypal announced that the next phase of its bitcoin support rollout was about to allow the option to pay with cryptocurrency instead of monies on account, credit cards and other payment methods at a PayPal vendor’s checkout. The ability to accept Bitcoin and other digital currencies as legal tender is not being compelled on PayPal merchants. Still, it’s expected the vast majority of its vendors will take advantage of the new service.
When a user pays with a crypto asset like Bitcoin, PayPal will act as an invisible middleman. PayPal will instantly convert the sum spent by a consumer with a vendor into the corresponding amount of fiat currency, free of charge, and then send this fiat currency to the vendor in exchange for goods or services. The timing of the full rollout for this new service for vendors has not been determined yet. However, PayPal company’s announcement claims that it will be functional with all 29 million vendors in the next several months.
Since PayPal will not charge any fees for these digital currency transactions, this move does not in itself seem like a way to increase profits on its exchange services. However, PayPal’s CEO Dan Schulman points out…
“Enabling cryptocurrencies to make purchases at businesses around the world is the next chapter in driving the ubiquity and mass acceptance of digital currencies.”
There is little doubt that this will be a big boost to Bitcoin, a decentralized crypto asset that has skyrocketed the last few years to as high as an exchange rate of $60,000 for each Bitcoin.
Other companies like MasterCard, Visa and American Express are also moving towards cryptocurrency payments, which could drive wider global use of bitcoin that could drive the digital currency to new record highs.
The inability to buy products and services ubiquitously has been a frequent criticism of cryptocurrencies. These moves by PayPal and credit card companies will change Bitcoin and other digital currencies from a speculative investment play to a true currency that tens of millions of vendors and hundreds of millions of customers use daily.
PAYPAL'S ANNOUNCEMENT PUSHES CRYPTO MARKET