PayPal announced plans to incorporate cryptocurrency into its online payment platform. Available later this year, the announcement makes PayPal one of the most significant companies in the financial technology sector to adopt support for virtual currencies.
PayPal is one of the most recognizable online payment platforms. It is widely used and accepted in the United States. While they began as a payment platform for businesses when founded in 1998, over 20 years later they now offer pre-paid debit cards, debit cards attached to your PayPal balance, credit cards and consumers can have their pay directly deposited. They have been a leader and frontrunner in the industry, especially after “marrying” eBay and acquiring Venmo. The company looks to break yet another barrier by incorporating cryptocurrency into its platform for online payments.
Paypal really spearheaded the online payment processing industry as one of the first companies to see a need and fill it. Beginning with businesses, the company eventually grew to process peer-to-peer payments. Still, PayPal is not without its faults having undergone scrutiny and lawsuits around blocking accounts shortly after going public. However, they are now one of the most trusted methods for businesses and consumers alike to send and receive payments. TheStreet.com had this to say about PayPal:
“Overall, investors and analysts view PayPal as a major player in the global digital payments sector and, despite intense competition from fintech players and major global banks fighting over the same customers, the company seems well-positioned for financial growth going forward, with a rising share price a seemingly foregone conclusion.”
Share prices are likely going to go up even more after the announcement that PayPal is going to incorporate cryptocurrency into its online payment system. Square began supporting bitcoin in 2018, but PayPal is supporting bitcoin, Ethereum, Bitcoin Cash and Litecoin and plans to add the same support to Venmo next year. Meanwhile, U.S. users can get on PayPal’s wait list to access cryptocurrency in the next few weeks.
“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,” PayPal CEO Dan Schulman said in a statement. “Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange.”
The adoption of cryptocurrency in online payment platforms is something companies have been looking to develop in recent years, with many wondering when someone would develop the PayPal of cryptocurrency. Who better to step in and start the process than PayPal themselves? This move will change the landscape of cryptocurrency, furthering its use and making it more accessible to consumers. Per Reuters, transactions on the platform will use fiat currency, so there won’t be a need to transfer digital coins into dollars. Initially, PayPal will restrict users to purchasing cryptocurrency on its own platform and will not allow transfers in of currency purchased elsewhere.
PayPal’s adoption of cryptocurrency is a major announcement. It propels the company to the forefront of this movement and provides the next step in moving to all-digital currency. Still, users and business owners who are unfamiliar with cryptocurrency should proceed with caution. Do your research before jumping on the bandwagon and make sure it’s the right move for you and your business. Eventually, digital currency may be the only currency used, but we are still a long way from that. Make sure now is the right time, and if you’re not sure, ask an expert!