PayPal now allows consumers to pay in digital currency at the 29 million merchants that accept PayPal payments through its new service ‘Checkout with Crypto.’
PayPal was one of the first legacy institutions to integrate digital currency support by letting its users buy, sell, and hold digital currency on their platform. But now, PayPal is looking to expand the utility of the digital currency their users hold by allowing them to use it for payments at merchants.
“As the use of digital payments and digital currencies accelerates, the introduction of Checkout with Crypto continues our focus on driving mainstream adoption of cryptocurrencies, while continuing to offer PayPal customers choice and flexibility in the ways they can pay using the PayPal wallet,” said Dan Schulman, president and CEO of PayPal. “Enabling cryptocurrencies to make purchases at businesses around the world is the next chapter in driving the ubiquity and mass acceptance of digital currencies.”
How it works
If the consumer has enough digital currency in their PayPal digital currency wallet to complete their purchase, they will be presented with the option to pay in digital currency. If the consumer selects the digital currency payment option, then PayPal automatically converts their digital currency to fiat and completes the transaction. At no time does the merchant receive digital currency for the goods and services they sell.
PayPal does not charge a transaction fee for Checkout with Crypto; instead, a digital currency conversion spread is built into the conversion from crypto to USD. At the moment, PayPal lets consumers pay with BTC, LTC, ETH, and BCH.
It will be interesting to see how many PayPal users actually use the Checkout with Crypto option. Most digital currency owners are hesitant to pay for goods and services with their digital assets because nobody wants to be the next ‘Bitcoin pizza guy,’ the individual who paid 10,000 BTC for two large pizzas back in 2011–today, that 10,000 BTC is worth over $500 million.
PayPal is not the only major company to enable digital currency payments for goods and services; recently, Elon Musk’s Tesla announced that they would let consumers buy their cars in BTC.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.