PayPal Pushes Crypto Further Mainstream With Checkout Service for 29M Merchants
The move could speed the use of crypto in day-to-day commerce.
PayPal, which last year added the ability to buy, hold and sell cryptocurrency, is pushing it as a payment method across the 29 million or so online merchants connected to the fintech giant.
Announced Tuesday, PayPal’s Checkout will allow bitcoin (BTC), ether (ETH), bitcoin cash (BCH) and litecoin (LTC) to be seamlessly converted into U.S. dollars or other fiat currencies when making purchases, the same as credit card or a debit card would work inside a PayPal wallet, said PayPal – meaning merchants will not actually be the recipients of cryptocurrencies.
Though the payments giant had said last year it was working on this feature, the news was enough to drive up the currencies involved, particularly BTC, which rose more than $1,000.
Calling it “a new way for businesses to get paid,” the checkout service is all about driving mainstream adoption of cryptocurrencies, said PayPal CEO Dan Schulman.
“Enabling cryptocurrencies to make purchases at businesses around the world is the next chapter in driving the ubiquity and mass acceptance of digital currencies,” Schulman said in a statement.
Cryptocurrencies are going mainstream, with banks and institutional investors taking an interest, but the utility of bitcoin and other crypto tokens when it comes to buying goods has always been limited due to their volatility.
PayPal, which made a huge splash when it officially entered the crypto space in October, wants to smooth those wrinkles out and get its wide network of merchants on board.
Since introducing the crypto service, PayPal has increased weekly purchase limits two times from $10,000 to $15,000 and then $20,000.
Visa announced this week that it was testing out payments functionality using USDC stablecoin, a cryptocurrency held at parity with the U.S. dollar, on the Ethereum blockchain, via crypto-backed Visa cards.
PapPal said its merchants will not incur any additional integrations or fees, and fiat conversions will take place at the standard PayPal conversion rates, according to a press release.
Still, the terms and conditions for “Checkout with Crypto” include a number of important caveats. Chief among them is the tax liability: “Sales of Crypto Assets via Checkout with Crypto are taxable just like all other sales of Crypto Assets.”
PayPal will provide the consumer with a 1099 tax form and report to the U.S. Internal Revenue Service as necessary, but “it is your responsibility to determine what taxes, if any, apply to transactions you make.”
The T&C also warns the Checkout with Crypto service “may not be available as a funding option for all merchants, customers or purchases.”