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PayPal Offering Crypto Payments From 2021

PayPal offering crypto

March 16, 2021 | 

JOHN K MWANIKI |  0 Comments| 

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Get Into Cryptocurrency Trading Today

Cryptocurrencies are all the rage right now. From Bitcoin surpassing the $50,000 mark to XPR helping institutions perform international money transfers, many people are finally opening their eyes to the truth cryptocurrency enthusiasts have been trying to tell us all along. In the last few years, more and more big companies have shown public interest in either investing in cryptocurrencies or using them to transact, or both. 

PayPal is one of these companies. Since October 2020, they have taken steps to help their crypto curious and crypto-enthusiastic consumers to buy, hold and sell specific cryptocurrencies. In 2021, PayPal is offering crypto payments to selected merchants. Learn more in this article.

PayPal offering crypto services in 2020

In 2020, PayPal announced they were collaborating with Paxos Trust Company to allow their customers to trade four cryptocurrencies. These cryptocurrencies are Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. Paxos provides the current selling prices for bitcoin, while PayPal uses their payment systems and wallets to purchase and store the coins. The services rolled out in October, were limited to trading and only to eligible US citizens. PayPal promised to expand its services in 2020 outside the US borders.

Introducing crypto payments in 2021

In 2021, the eligible US and non-US citizens will be able to make payments using the allowed cryptocurrencies. According to PayPal, these services will be available for over 25 million merchants. There are other things it is rolling out in 2021, like expanding these crypto services to Venmo, but the option of making payments using the cryptocurrencies in your wallet is the most exciting. Here are a few advantages of PayPal offering crypto payments.

Advantages of using crypto payments

a.    You avoid transacting with an intermediary

One advantage cryptocurrencies have over fiat currencies is the fact that there is no intermediary. When you make payments through a bank, your transaction has to go through that bank. However, when paying using crypto, your transaction is direct with the seller or service provider.

b.    It’s impossible for a third party to manipulate transactions

When paying with a cryptocurrency that uses blockchain technology, every transaction is recorded in a public ledger that cannot be altered. This eliminates excuses such as not receiving the payment or hacking meant to interfere with transaction records.

c.    You can pay any merchant anywhere

When you want to shop in a different country, you normally have to convert your money to the country’s currency, and then you pay them in their currency. When making crypto payments, there is no conversion necessary. This makes the purchasing process easy and efficient. Just add the items you want to the cart, give your email (in the case of PayPal), and the money is deducted from your wallet.

The four cryptocurrencies accepted by PayPal crypto services

There are hundreds of crypto services around today compared to ten years ago. PayPal allows transacting with four specific cryptocurrencies. Here is a little more information about each.

  1. Bitcoin – Bitcoin is the most known cryptocurrency. It was introduced in 2009 by an unknown individual(s) known as Satoshi Nakamoto. It’s the number 1 cryptocurrency by market cap. In the last year (between March 2020 and March 2021), it has more than quadrupled in value.

  2. Ethereum – Also known as ether, this is the 2nd cryptocurrency by market cap. It was launched in 2015 and has a smart contracts feature.

  3. Litecoin – This cryptocurrency, created in 2011 by Charles Lee, takes 9th place by market cap. The major difference between it and Bitcoin is that it takes a much shorter time to mine. Where it takes miners 10 minutes to mine a bitcoin, it takes 2.5 minutes to mine a Litecoin. It also uses scripts as proof of work

  4. Bitcoin Cash – This cryptocurrency was created in 2017. It was created from a fork of bitcoin. While it shares many of the fundamental characteristics of Bitcoin, one major difference is that its blocks can accommodate more transactions than a Bitcoin block.

Why companies are showing interest in cryptocurrencies

PayPal offering crypto payments is not a surprising move as many companies are showing interest in offering crypto services. Here are a few reasons why this is the case;

  1. Cryptocurrencies are a hedge against inflation – One of the chief characteristics of good inflation hedges is a limited supply. Like gold, cryptocurrencies make a good inflation hedge as once their cap has been reached, it cannot be exceeded

  2. Making international transactions easier – Cryptocurrencies do not belong to any individual country. This means that no matter what country you go to, as long as someone can receive the payment, you don’t need to do any conversions or transfer from your bank to a wallet in that country. Life is very convenient when you don’t need to worry about cumbersome bank transfers and exchange rates

  3. Lower transactional fees – Even when you are using a third-party service, you cannot compare the transactional fees you pay to a bank to those you pay to make crypto payments.

  4. Cryptocurrencies are a wonderful investment – When Bitcoin was launched, the price of one coin was less than a dollar. If someone purchased 10 dollars’ worth of bitcoin, for example, and if they kept it all this time, one can only imagine how much money they will get when they sell their bitcoin. This increase in value makes bitcoin investment seem very lucrative, though it may favor people with high-risk appetites.

Conclusion

The world is becoming a digital village. While distance may separate people, technology is helping make interactions easier and better. With companies like PayPal offering crypto payments, eCommerce has never been easier. All you have to do now is give the merchant your shipping address and wait for your product to arrive to you. As for services, combine the prevalence of people working and learning online with digital payments, and some people will have few reasons to leave their homes. 

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