Bitcoin climbs as PayPal launches ‘Checkout with Crypto’
PayPal Pushes Crypto Further Mainstream With Checkout Service for 29M Merchants
PayPal, which last year added the ability to buy, hold and sell cryptocurrency, is pushing it as a payment method across the 29 million or so online merchants connected to the fintech giant.
Announced Tuesday, PayPal’s Checkout will allow bitcoin (BTC), ether (ETH), bitcoin cash (BCH) and litecoin (LTC) to be seamlessly converted into U.S. dollars or other fiat currencies when making purchases, the same as credit card or a debit card would work inside a PayPal wallet, said PayPal – meaning merchants will not actually be the recipients of cryptocurrencies.
Though the payments giant had said last year it was working on this feature, the news was enough to drive up the currencies involved, particularly BTC, which rose more than $1,000.
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Calling it “a new way for businesses to get paid,” the checkout service is all about driving mainstream adoption of cryptocurrencies, said PayPal CEO Dan Schulman.
“Enabling cryptocurrencies to make purchases at businesses around the world is the next chapter in driving the ubiquity and mass acceptance of digital currencies,” Schulman said in a statement.
Cryptocurrencies are going mainstream, with banks and institutional investors taking an interest, but the utility of bitcoin and other crypto tokens when it comes to buying goods has always been limited due to their volatility.
PayPal, which made a huge splash when it officially entered the crypto space in October, wants to smooth those wrinkles out and get its wide network of merchants on board.
Since introducing the crypto service, PayPal has increased weekly purchase limits two times from $10,000 to $15,000 and then $20,000.
Visa announced this week that it was testing out payments functionality using USDC stablecoin, a cryptocurrency held at parity with the U.S. dollar, on the Ethereum blockchain, via crypto-backed Visa cards.
PapPal said its merchants will not incur any additional integrations or fees, and fiat conversions will take place at the standard PayPal conversion rates, according to a press release.
Still, the terms and conditions for “Checkout with Crypto” include a number of important caveats. Chief among them is the tax liability: “Sales of Crypto Assets via Checkout with Crypto are taxable just like all other sales of Crypto Assets.”
PayPal will provide the consumer with a 1099 tax form and report to the U.S. Internal Revenue Service as necessary, but “it is your responsibility to determine what taxes, if any, apply to transactions you make.”
The T&C also warns the Checkout with Crypto service “may not be available as a funding option for all merchants, customers or purchases.”
UPDATE (March 30, 10:50 UTC): Adds details from PayPal’s terms and conditions and background on the company’s history in the crypto sector.
PayPal launches Checkout with Crypto
PayPal launches Checkout with Crypto
PayPal today announced the launch of Checkout with Crypto. With this feature, PayPal customers can pay with crypto coins alongside other payment methods in their PayPal wallet. Checkout with Crypto is available at millions of global online retailers and other businesses.
Checkout with Crypto starts rolling out to PayPal customers in the US today, but it seems obvious that this feature will soon expand to Europe and other parts of the world. A similar thing happened in October last year when PayPal announced it would allow its customers to buy, sell and hold Bitcoin and other crypto coins.
With Checkout with Crypto, consumers can use coins to pay at online retailers worldwide.
One type of cryptocurrency allowed for each purchase
With Checkout with Crypto, consumers can use their cryptocurrency holdings (Bitcoin, Litecoin, Ethereum or Bitcoin Cash) to pay at millions of online retailers worldwide. “A move that could significantly boost use of digital assets in everyday commerce”, Reuters writes. Only one type of cryptocurrency can be used for each purchase.
Checkout with Crypto appears in PayPal wallet
By using Checkout with Crypto, users can convert their cryptocurrency holdings to fiat currencies like euros and dollars with no additional transaction fees. The new feature will automatically appear in the PayPal wallet at checkout for customers with enough coins to cover an eligible purchase.
“As the use of digital payments and digital currencies accelerates, the introduction of this feature continues our focus on driving mainstream adoption of cryptocurrencies, while continuing to offer PayPal customers choice and flexibility in the ways they can pay using the PayPal wallet”, CEO Dan Schulman commented. “Enabling cryptocurrencies to make purchases at businesses around the world is the next chapter in driving the ubiquity and mass acceptance of digital currencies.”
No additional integrations or fees required
The payments company explains that for companies, there are no additional integrations or fees required. “All transactions are settled in dollars and converted to the applicable currency for the business at the standard PayPal conversion rates.”
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