In a history-making move, PayPal took the next step forward in mainstream cryptocurrency adoption this week with the announcement of the option for users to check out with crypto.
Every user with enough cryptocurrency available in their PayPal accounts to cover a payment will now see an option to Checkout with Crypto when they go to checkout at one of the 29 million PayPal merchants around the world!
PayPal Helps to Spur Mainstream Cryptocurrency Adoption
The new Checkout with Crypto feature is a huge step forward in providing substantial utility for cryptocurrency and those who prefer to transact in crypto over traditional fiat. Before the feature’s implementation, customers would have to sell their holdings before making a purchase and use the resulting cash balance in their account to pay for goods and services.
However, the new crypto checkout feature makes the process quick and seamless – users will only have to sell enough of their crypto necessary to pay for the items in their digital shopping carts!
The increased ease of use of cryptocurrency as a form of payment will inevitably lead to greater cryptocurrency adoption through the PayPal platform – it could be the deciding factor for many cryptocurrency users as opposed to other trading platforms like Cash App or Coinbase.
PayPal’s Future In Crypto
PayPal is just getting started in the cryptocurrency space.
As mentioned previously in the article, PayPal has quickly caught up to competitors like Square and is pulling away just as quickly. There remains no doubt that PayPal wants to make cryptocurrency investing and spending a primary facet of its payment platform and application.
According to PayPal CEO Dan Schulmann, the company is already working with regulators and central banks to “reimagine and shape the next generation of the financial system” and expects “to see cryptocurrency completely change our financial institutions.”
How the New Checkout with Crypto Feature Works
Here is a quick breakdown of PayPal’s new Checkout with Crypto features and its most crucial parts:
- Cryptocurrency is converted to fiat currency on the customer’s behalf before payment to the merchant is sent in USD.
- PayPal doesn’t charge a transaction fee to pay with crypto, but it does bake in a spread on the conversion from crypto to dollars.*
- Converting to USD before remitting payment to the merchant allows PayPal to support Checkout with Crypto across all of its merchants without requiring anything additional from their side.
*Note: PayPal isn’t charging a transaction fee on purchases made with crypto. Instead, it’s making money off the spread in its conversion rates – this ultimately gives PayPal greater control over its profit margin. It also, for better or worse, obfuscates that fee.
PayPal has been teasing the new Checkout with Crypto feature since it launched the ability to buy cryptocurrency in the digital wallet last year. Now that it has officially launched, the new feature could further increase engagement with PayPal and push it toward a daily utility.