PayPal logo seen displayed on a smartphone. Photo: Rafael Henrique/SOPA Images/LightRocket via Getty Images
PayPal is set to begin allowing customers to make purchases on its platform by converting their cryptocurrency holdings into fiat currencies at checkout, according to Reuters.
Why it matters: Despite the surge in popularity of cryptocurrencies like bitcoin, the volatile asset has not become a mainstream form of payment. PayPal believes its move will help make cryptocurrency use more common, per Reuters.
Details: PayPal will not charge a transaction fee for customers using crypto, though only one type of crypto coin will be allowed per purchase, Reuters reports.
- Customers holding bitcoin, ether, bitcoin cash and litecoin in their Paypal accounts will be able to convert their cryptocurrencies into fiat.
- The company hopes to have the crypto checkout service available at all its 29 million vendors in the next few months.
What they're saying: "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 president and CEO Dan Schulman told Reuters.
- “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."
Our thought bubble, via Axios chief financial correspondent Felix Salmon: While millions of people have PayPal wallets, many fewer use them to hold bitcoin, and most of those who do are prone to hold rather than spend.
- The reason bitcoin hasn’t taken off as a payment mechanism is less about acceptance and more about the tiny number of people that want it to use it that way.
Go deeper: Elon Musk's bet on bitcoin as payment