PayPal has allowed US customers to use cryptocurrency to make payments at its online merchants globally, which facilitates immediate conversion into US dollars.
PayPal's Checkout Facility
PayPal wallets that contain various cryptocurrencies such as Bitcoin, Litecoin, Bitcoin Cash, and Ether can be used as fiat currencies for payments at checkouts, says the company. It is the first time that cryptocurrency is used for making payments like a debit card or a credit card in the PayPal wallet, says CEO and President Dan Schulman. Customers can use their digital assets towards everyday commerce transactions on its platform, which will increase the number of users.
When cryptocurrency payment is made through the PayPal platform, it gets converted into US dollars, which completes the transaction. The Checkout with Crypto facility has ushered in more users into the crypto market, creating a rally in crypto prices.
PayPal is one of the largest financial companies to make this offer open to its users. Customers can checkout with cryptos to buy, sell and hold cryptocurrencies. But only one type of coin can be used for a purchase, says the CEO. The user should also have sufficient cryptocurrency to make the payment complete.
PayPal had announced its checkout service last year, and the service is now available in its 29 million merchants. Cryptocurrencies are now used in the real world and have become a legitimate funding source, says Schulman. Companies are providing many options to customers to use cryptocurrency to complete their transactions, which brings in more awareness among users. Large companies like PayPal and Visa are such companies that provide options for users to buy, sell and hold cryptocurrencies.
Major Companies Providing Digital Payments
PayPal, the California-based payment company launched the facility in October, and account holders in the United States can now make use of these services.
Tesla, the car company has also announced that it would accept Bitcoin as payment for its vehicles. However, the company has mentioned that Bitcoin will be accepted as payment and will not be transformed into fiat currency.
Visa has also allowed users to use its USD Coin (USDC) to make payments on its network. Visa's pilot program helps customers eliminate the difficulties involved in converting cryptocurrencies into fiat currency. Visa CEO Al Kelly says that people can soon buy and sell Bitcoin through its network, following the lead from other fintech companies like Square and PayPal. The payment company is making use of the current trend that makes investors lean towards digital assets.
Cryptocurrencies are now coming into common usage, as more and more mainstream customers are using crypto as a form of payment. The covid-19 pandemic has promoted the use of cryptocurrencies as a digital class asset. Further, usage of digital currencies is promoted through large corporate businesses, investors, and fund managers. Central banks of many countries like China and India are showing enthusiasm to introduce their own cryptocurrency. The crypto market attracts new investors, who are drawn by the volatile upmove in prices of cryptocurrencies.
PayPal is taking steps to work with regulators and the government to expand its crypto payment network across its platform. PayPal has more than 300 million consumers, and it has been a leading digital payment company that uses its financial service in commercial transactions.
BTC/USD
Bitcoin prices have surged past $59,000 after the announcement from PayPal about its crypto checkout service. It is within reach of its lifetime high at $61,700, which it reached in mid-March 2021.
BTC/USD has almost doubled in value in the first quarter of 2021 and is trading above $59,000 currently. It has gained around 27% in March alone. The world's largest cryptocurrency prices have risen sharply in the current year as more investors enter the crypto market.
ETH/USD
Ethereum at $1,930 is less than 10% away from its all-time high at $2,040, reached in February 2021. It was at $750 in January 2021 and is almost three times its value now.
XRP/USD
The lawsuit with the SEC had brought down the prices of the XRP wherein XRP/USD moved to 0.2200 levels in January 2021. However, the pair has recovered and has moved to 0.5659 in March.
Other major cryptocurrencies like Cardano and ripple have also surged higher.
Cryptocurrency Risks
Some users are averse to cryptocurrencies for many reasons. While some fear that price fluctuations are high, some investors are aware of the risks involved, such as hacking and malware attacks to which cryptocurrencies are exposed to.
The high volatility in the cryptocurrency prices and lack of proper regulatory bodies are other issues that keep investors away. Investing in cryptocurrency carries a certain degree of risk. Famous personalities like Elon Musk, the CEO of Tesla, can manipulate the crypto market with a single tweet that creates a surge or decline in cryptocurrency. Musk has around 47 million Twitter followers.