The Launch of PayPals Crypto Checkout Service is Imminent – Decrypt
PayPal has launched Checkout With Crypto, a cryptocurrency service for merchants across the US, and will roll it out over the next few months.
“This is the first time you can seamlessly use cryptocurrencies in the same way as a credit card or a debit card inside your PayPal wallet,” PayPal CEO Dan Schulman told Reuters.
Checkout With Crypto service will enable those holding cryptocurrencies on the platform to spend it with all of PayPal’s merchants. Supported cryptocurrencies include Bitcoin, Bitcoin Cash, Ethereum, and Litecoin; the payments company will, however, convert the cryptocurrency to fiat money for the actual payment.
“We think it is a transitional point where cryptocurrencies move from being predominantly an asset class that you buy, hold and or sell to now becoming a legitimate funding source to make transactions in the real world at millions of merchants,” Schulman added.
The payments company won’t charge their customers for swapping crypto to make the payment. However, there will be a conversion spread, meaning that it might swap the cryptocurrency as lower-than-market rates and pocket the difference—a common technique by crypto wallet apps with in-built conversions.
At the checkout, PayPal will check if the user has enough balance in cryptocurrency to pay for the items. If they do, it will present cryptocurrency as a payments option.
PayPal initially announced that it would enable users to buy and hold cryptocurrencies on the platform in October 2020. At the time, Schulman said in a statement that, “The shift to digital forms of currencies is inevitable,” and that the firm was “thinking of all forms of digital currencies and how PayPal can play a role.”
The company has partnered with Paxo Crypto Brokerage to create its crypto-centric payments service, with Paxos providing crypto custody and trading features for the platform.
PayPal’s embrace of crypto marked a significant about-face for the company, which had historically shied away from cryptocurrency. The news sparked a crypto bull run that’s seen Bitcoin’s price rise from under $12,000 at the time of the announcement, to its current price of nearly $60,000.
However, not all cryptocurrency advocates were wholeheartedly in favor of PayPal’s move into crypto; the platform’s terms and conditions state that “the crypto in your account cannot be transferred to other accounts on or off PayPal,” prompting some to argue that PayPal was disregarding “fundamental tenets” of cryptocurrency.
PayPal is planning to expand its crypto offering beyond the US in 2021, noting in February that it plans to expand its crypto offering to the UK in “a number of months.”