PayPal launches crypto checkout service
The PayPal application is seen on an iPhone
PayPal will announce later on Tuesday that it has started allowing U.S. 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.
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 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.
PayPal rolls out crypto checkout feature in the U.S.
PayPal Holdings Inc. will start letting its U.S. customers purchase items with cryptocurrencies in the latest embrace of digital assets by a traditional payments player.
The company announced Tuesday that U.S. customers who hold cryptocurrencies in their PayPal PYPL, +0.37% mobile wallets will be able to use those digital assets to buy goods from PayPal merchants beginning today. The feature will initially be available with millions of PayPal merchants, with plans to add more in the months to come.
Through the feature, called Checkout with Crypto, PayPal users will be able to choose from bitcoin BTCUSD, +0.38% , litecoin LTCUSD, +0.51% , ethereum ETHUSD, +0.34% or bitcoin cash BCHUSD, -0.13% , the company said. They’ll have the ability to select their preferred cryptocurrency at checkout depending on the types of crypto holdings they have and whether they have enough to cover a given purchase.
PayPal said that it won’t charge a transaction fee for consumers checking out using cryptocurrencies and that a conversion spread will be built into the conversion from crypto to U.S. dollars.
“Enabling cryptocurrencies to make purchases at businesses around the world is the next chapter in driving the ubiquity and mass acceptance of digital currencies,” Chief Executive Dan Schulman said in a statement. The company previously teased its plans to roll out crypto checkout capabilities.
The company plans to settle all of the transactions in U.S. dollars and convert payments to the applicable currencies of its various merchants at its usual conversion rates.
PayPal previously rolled out the ability for users to buy, sell, and hold cryptocurrencies, working with Paxos Trust Company, a virtual-currency provider that maintains the crypto holdings of PayPal customers. PayPal itself doesn’t currently plan to purchase crypto for investment or cash-management purposes, a spokesperson told MarketWatch, and while the company may ultimately decide to hold some balance for operational purposes, it hasn’t yet deemed that necessary.
The company views cryptocurrencies as a way to get customers to engage further with its platform. Those who’ve purchased cryptocurrencies through PayPal thus far have logged into PayPal at twice the rate that they did before, the company shared at its recent investor-day presentation.
Other financial-services companies have moved to embrace cryptocurrencies in their own ways. Mastercard Inc. MA, -1.30% plans to begin letting merchants directly accept some cryptocurrencies later this year, though the company plans to be selective, with a focus on digital assets that have some price stability and meet various standards for compliance. Square Inc. SQ, +2.73% lets customers buy and sell bitcoin through its mobile wallet, and Visa Inc. V, -1.22% recently announced a pilot program allowing crypto platforms to settle transactions made with their issued Visa cards without converting funds to fiat currency.
3 crypto-market trends to look out for this year, according to PwC
Bitcoin’s meteoric rise has boosted crypto hedge funds Dado Ruvic/Reuters
Cryptocurrency M&A is expected to have a stellar 2021, according to PwC, after the value of M&A deals in the space doubled year over year in 2020.
The firm revealed that the average M&A deal size jumped by 174% from $19.2 million to $52.7 million in 2020.
PwC outlined the three trends to expect in the crypto space in 2021.
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Mergers and acquisitions will be a big theme in the cryptocurrency space, according to PwC, after the value of M&A deals in the sector doubled year over year in 2020.
In a report published on Monday, the Big Four accounting firm revealed that the average M&A deal size jumped by 174% from $19.2 million to $52.7 million, with four deals valued at more than $100 million in 2020. The firm also revealed that transactions are shifting away from the Americas, with 60% occurring in Asia and Europe compared to 2019.
Transactions, according to PwC, are also more spread out across categories.
“With increasing interest in crypto from retail and institutional investors following the positive market momentum, it is not surprising to see increase M&A in the broader train sector,” the report said.
The report comes amid a rapid rise of interest in the cryptocurrency space, with bitcoin, the most popular digital asset, rising 600% in the past year alone. While many bitcoin bears continue to criticize cryptocurrencies, many advocates are expecting the boom to continue amid rising interest from both retail buyers and institutions.
The UK-based firm, in the report, then outlined the three trends to expect in the M&A activity in the crypto space across the globe after a record-breaking 2020.
Crypto M&A will be be driven by large players
PwC said it expects to see further consolidation in the industry with larger, well-funded, and profitable firms seeking to continue their M&A activities. “We expect the focus to be not on the acquisition of smaller competitors but rather of firms that offer ancillary services to their current offering,” the report said, referring to crypto media, data, and compliance research.
Institutionalization of the crypto industry will continue
The firm said it predicts a steady continuation of institutionalization of cryptocurrencies, driven by the rally in the price of the digital tokens as well as heightened media attention on central bank digital currency (CBDC), stablecoins, decentralized finance (DeFi), and non-fungible tokens (NFTs). PwC said all these will serve as catalysts to more institutions wanting to enter the space through investing or acquiring.
M&A, as well as fundraising, will increase
Based on the bull market in the first quarter of 2021, PwC said it expects the number and value of M&A deals to increase this year. It also said it sees more activity comeing from Asia-Pacific and EMEA reagions.