- The PayPal crypto payments platform launched yesterday, four months after the investment platform went live
- PayPal crypto holders will soon be able to use cryptocurrency at any of the company’s 29 million U.S. merchants
- Users will need to convert to fiat first, which undermines the promise somewhat
PayPal users got their first taste of paying with cryptocurrency on the platform yesterday after the payments giant launched its merchant payment services. The move comes four months after the company launched its crypto investing platform and ushers in a new wave of crypto adoption, with PayPal crypto users now able to spend their gains at millions of retailers. However, the fact that users have to convert to a fiat currency before spending their money adds a level of friction that it had been hoped would be avoided.
Great in Theory, Not So Much in Execution
The ability to pay for goods and services with cryptocurrency was one of the big selling points of PayPal’s cryptocurrency offering, and its rollout was greeted with fanfare across both crypto and mainstream outlets. However, the fact that the cryptocurrency has to be converted into fiat currency at the point of sale almost negates the purpose and raises the question of what accepting cryptocurrency as a payment method actually means in practice.
It seems then that what the platform actually offers is the ability for PayPal cryptocurrency users to sell their tokens in return for cash which they can then use at one of PayPal’s 29 million merchants…which surely they would have been able to do anyway. If the platform converted the cryptocurrency for them at point of sale then it would be interesting, but it seems that this is a manual job required to be carried out by the user, which kind of negates the big selling points.
Visa Offering Could Trump PayPal Crypto
PayPal’s news came a day after Visa announced that it was embarking on a pilot program to allows USDC holders on the Crypto.com platform to pay at Visa-enabled terminals without having to first convert into fiat. While only a small scale pilot, this method of using crypto to pay for goods and services is a more appealing prospect for users, although of course it has its own drawbacks.