PayPal Launches New Services with Cryptocurrency Partner Paxos
PayPal will soon allow US customers to exchange and hold cryptocurrencies in their PayPal accounts. The new service will be available through a partnership with crypto brokerage Paxos Trust Company. Initially, account holders in the United States will be able to trade four cryptocurrencies.
The program was granted a license from the New York State Department of financial services.
When the service launches in a few weeks, PayPal users will be able to exchange and hold Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. Users can log in to their PayPal digital wallets to buy and sell these cryptocurrencies.
“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” said Dan Schulman, president and CEO, PayPal in the announcement.
The service will be rolled out to Venmo users before the summer 2021.
To attract users to their program PayPal Holdings, Inc. (NASDAQ: PYPL) stated the company won’t charge any service fees for buying or selling through the end of 2020. In addition, there won’t be fees for holding cryptocurrencies in PayPal.
PayPal Users to Pay with Cryptocurrencies
Early next year, the company plans on letting customers use cryptocurrencies as a funding source inside their PayPal digital wallets. Then they can use cryptos to make payments to any of millions of merchants in the PayPal network. The company said that there will be no additional fees or work on behalf of the merchants as all transactions will be settled in flat currencies.
Consumers will be able to:
- Instantly convert their cryptocurrency balance to fiat currency.
- There will be no incremental fees
- PayPal merchants will have no additional integrations or fees
- All transactions will be settled with fiat currency at their current PayPal rates
Digital wallets, sometimes called an eWallet, make buying at retail locations far more secure than presenting a physical credit card or payment card at a point of sale terminal. Many digital wallets, like the PayPal wallet, can even be used for online shopping.
When you pay with a digital wallet, your full card number is never given to the merchant. Instead they receive a one-time token to process the transaction with.
“Mainstream adoption of cryptocurrencies has traditionally been hindered by their limited utility as an instrument of exchange due to volatility, cost and speed to transact. However, the promise of advanced technological platforms offers the possibility of mainstreaming digital currencies.” said the announcement from PayPal.
PayPal will add users from other countries after the initial launch with US-based customers. The company may add more currencies later on.