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PayPal launches crypto checkout service

A move that could significantly boost use of digital assets in everyday commerce.
Image: Bloomberg

PayPal Holdings Inc will announce later on Tuesday that it has started allowing US consumers to use their cryptocurrency holdings to pay at millions of its online merchants globally, a move that could significantly boost use of digital assets in everyday commerce.

Customers who hold bitcoin, ether, bitcoin cash and litecoin in PayPal digital wallets will now be able to convert their holdings into fiat currencies at checkouts to make purchases, the company said.

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The service, which PayPal revealed it was working on late last year, will be available at all of its 29 million merchants in the coming months, the company said.

“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,” President and CEO Dan Schulman told Reuters ahead of a formal announcement.

Checkout with Crypto builds on the ability for PayPal users to buy, sell and hold cryptocurrencies, which the San Jose, California-based payments company launched in October.

The offering made PayPal one of the largest mainstream financial companies to open its network to cryptocurrencies and helped fuel a rally in virtual coin prices.

Bitcoin has nearly doubled in value since the start of this year, boosted by increased interest from larger financial firms that are betting on greater adoption and see it as a hedge against inflation.

PayPal’s launch comes less than a week after Tesla Inc said it would start accepting bitcoin payments for its cars. Unlike PayPal transactions where merchants will be receiving fiat currency, Tesla said it will hold the bitcoin used as payment.

Still, while the nascent asset is gaining traction among mainstream investors, it has yet to become a widespread form of payment, due in part to its continued volatility.

PayPal hopes its service can change that, as by settling the transaction in fiat currency, merchants will not take on the volatility risk.

“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,” Schulman said.

The company will charge no transaction fee to checkout with crypto and only one type of coin can be used for each purchase, it said.

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We are falling a bit behind the curve here.

+320 million customers. The writing was on the wall 2 years ago already. If you are a crypto/fintech/digital asset naysayer at this point you are equivalent to a flat earther. If you dont have a basic understanding of this asset class or doing a module on it in your uni course, you should not get a degree in business school or enter finance.

This news was not unexpected and is a massive boost for adoption and utilisation of crypto.

News that has perhaps slipped under the radar is that Mercury are opening up a payment corridor between London and Jhb.

“Historically, moving money between banks or money service providers in those two cities takes days to cover that distance. That literally means it would still be faster to put money on an airplane and physically fly it between the two cities.

International payments specialist Mercury aims to shorten that money transfer window to only minutes using RippleNet’s On-Demand Liquidity (ODL) service and the digital asset XRP.”

Why convert to fiat first though. That attracts cgt tax on the sale. Merchants would need to start accepting btc as the settlement currency before this is interesting.

exactlt! I agree 100%!

So it’s not a co incidence that Musk and Tesla have invested more than $1 billion into bitcoin ( before their latest results were published) that PayPal ( founded by Musk and Co) will now incorporate on its payment platform! It’s not what you know but who you know it seems. And could this be classified as a decision based on insider information? Hmmm time will tell ( maybe!!!)

SARB and the banks will become irrelevant in time!

End of comments.

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