PayPal to begin offering cryptocurrency transactions in 2021
The number of merchants using PayPal's network that will have access to digital currencies next year.
Earlier today, PayPal announced it would soon begin allowing transactions using cryptocurrencies like Bitcoin and Etherium via the company’s online wallets, with plans to expand the option to Venmo in early 2021. While the financial tech company is far from the first major player to offer cryptocurrency payment methods, PayPal’s decision will be one of the most far-reaching in fintech; over 26 million merchants operate on the company’s network.
Providing cryptocurrency, and education — While cryptocurrency transactions are a steadily growing option for online retailers, many customers remain leery of adopting the method for everyday purchases due to the market volatility and lag time between payments. PayPal seems to have anticipated the apprehensions, however.
“As part of this offering, PayPal will provide account holders with educational content to help them understand the cryptocurrency ecosystem, the risks and opportunities related to investing in cryptocurrency, and information on blockchain technology," reads the press release, while adding, "Consumers will be able to instantly convert their selected cryptocurrency balance to fiat currency, with certainty of value and no incremental fees." Customers won't be charged service fees for holding, buying, or selling cryptocurrencies through the end of the year, either.
Getting ahead of the crypto-curve — The move to adopt alternative payment options comes as the company prepares for the increasing numbers of private corporations and central banks offering their own digital currencies in the future. "We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role," PayPal President and Chief Executive, Dan Schulman, told Reuters. Recently, the service also expanded its reach into actual CVS pharmacies, allowing touch-free transactions via PayPal and Venmo in order to help customers during the current COVID-19 crisis.
Private digital currencies, while certainly a potential game-changer within the markets, might not arrive as quickly or seamlessly as corporations would like. Earlier this year, Facebook announced the termination of its Libra cryptocurrency plans, of which PayPal was an initial founding participant. And with the Department of Justice filing its antitrust suit against Google just yesterday, it's unlikely many major tech companies will want to tempt fate (and regulator scrutiny) with seismic shifts like their own digital currencies. Still, the introduction of these new payment methods appears to be inevitable, and as PayPal is demonstrating, the best choice is often to get ahead of the curve.