- PayPal announced that its US customers can now buy, sell, and hold cryptocurrencies.
- If the launch is successful, PayPal can bring this service to new markets, helping grow its customer base and diversify its offerings.
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The payments firm introduced its new crypto service that lets its users buy, sell, and hold cryptocurrencies last month. PayPal rolled it out to all US customers on Friday—and to meet high demand, it also increased the weekly cryptocurrency purchase limit from $10,000 to $20,000, per TechCrunch.
PayPal isn’t charging fees for holding cryptocurrencies, but buying and selling will carry fees starting in 2021. It says it’ll allow global customers to fund transactions using crypto balances across its merchant network by next year—which PayPal will convert and settle into fiat currency without additional fees.
The launch can position PayPal to capitalize on the burgeoning cryptocurrency payments market.
- US crypto demand among consumers and businesses is rising—making it an ideal starting place for PayPal. As cryptocurrencies continue to evolve, more consumers have taken interest in the offerings, especially in the US: The number of US adults owning cryptocurrencies doubled in 2019, reaching a projected 36.5 million users, per a Finder Survey. And businesses seem to be taking an interest in crypto as well, with 19% offering it as an online payment method, according to a Paysafe survey. PayPal’s launch could help the firm cash in on the buying and selling activity in the US market—and if successful, it can bring this part of its service to global markets.
- Central banks and other global bodies have taken an interest in moving toward digital currencies, positioning PayPal to capitalize on the growing demand. Central banks in Japan, the eurozone, the UK, Sweden, and Switzerland have joined forces with the Bank for International Settlements on an initiative to explore use cases for digital currencies. And the International Monetary Fund recently said that cryptocurrencies could be “the next step in the evolution of money,” further suggesting that it could be a viable option for everyday payments. With cryptocurrencies gaining global exposure in the payments realm and PayPal being a leader in that space, the firm can position itself to build relationships with global government agencies to induce increased adoption of crypto payments.
PayPal can use its new service to diversify its payment offerings and keep a competitive edge. PayPal’s cryptocurrency service provides a new revenue opportunity for the firm since it might appeal to a previously untapped customer demographic—those interested in buying and selling crypto—and help PayPal grow its user base. Furthermore, the offering could help PayPal ensure that it’s on par with competitor Square, which introduced a similar service that garnered tremendous success, helping it reach $1.92 billion in net revenues in Q2.