Mobile and digital payments giant Paypal has announced the launch of its “Checkout With Crypto” service. This service will allow its users to use cryptocurrencies from their Paypal wallets to make payments at millions of merchants that support the platform.
“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,” said Dan Schulman, the CEO of Paypal.
Paypal Launches its Crypto Checkout Service
In a continuation of its long-term goal to enable worldwide use of cryptocurrency, online payments giant Paypal has announced that it will allow its US-based customers to pay in Bitcoin (BTC), as well as other leading cryptocurrencies, upon checkout with various vendors.
Customers who hold Bitcoin, Ether, Litecoin, or Bitcoin Cash in their PayPal digital wallet will now be able to convert their crypto holdings into fiat currencies at checkouts to make purchases, the digital payment giant stated.
The service will be available at all of its merchants (29 million ) in the following months, the company said.
This announcement came as the next step in Paypal’s attempt to popularize cryptocurrencies. The platform enabled its US-based customers to buy, sell and hold cryptocurrencies directly from their accounts in November 2020. With the added functionality of being able to use cryptocurrencies at checkout, Paypal is trying to enter the sector in a big way.
However, while the overall customer base is quite happy with the development, several crypto enthusiasts stepped out and expressed their concern for how Paypal is handling the situation.
Cryptocurrency vs. Cryptocurrency Network
The concern regarding how Paypal is handling its crypto implementation is mostly overshadowed by the general population’s positivity towards the direction that the platform took. However, we can’t deny that, by using Paypal, we are giving up a couple of main purposes of cryptocurrencies, mainly: decentralization and immutability.
While users have many functionalities when using the Paypal wallet, they can’t withdraw cryptocurrencies to their native wallets. This decision is questionable, as Paypal gave its users access to cryptocurrencies, but not to the network itself.
On top of that, every crypto payment that goes towards the merchants is getting transferred to the native fiat currency of the merchant. This only gives the illusion of crypto payments, as the merchants are actually receiving fiat currency rather than crypto. However, this problem is a bit more manageable, as Paypal announced that, as soon as more merchants start accepting crypto, they will allow for direct crypto payments as well.
We also have to take into account immutability, or the ability of cryptocurrencies not to be “muted.” Paypal, as a centralized entity, has every right to stop certain crypto transactions if they feel like it. This goes against one of the core principles of cryptocurrencies.
Conclusion
While Paypal’s change of narrative towards cryptocurrencies from complete denial to acceptance is more than great, we have to take into account that some of the current solutions that Paypal provided aren’t exactly optimal.
Users that choose Paypal as their crypto wallet of choice have to compromise on several core concepts of cryptocurrencies in exchange for the ability to use their holdings for real-world payments.
Paypal customers will have to decide on whether this compromise is worth it, and how much they are willing to give up to access such a payment system.
With that being said, Paypal’s step towards crypto adoption is certainly a positive thing that could influence other large entities to invest in cryptocurrencies, or adopt them in any other way, shape, or form.
Though KUCOIN currently hasn’t supported purchasing crypto with PayPal, we’ve made much efforts on KuCoin Fiat Gateway where users can buy cryptocurrencies like Bitcoin, Ethereum and other cryptocurrencies easily with credit and debit cards. To further broaden the access of crypto to more people globally, we are also exploring to cooperate with more fiat partners.
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