PayPal has announced the launch of a new facility at their platform, where users can now checkout with crypto. The new feature is also titled Checkout with Crypto.
What this essentially is doing is that it is converting the crypto to fiat currency. While PayPal hasn’t yet given users the choices of cryptocurrencies, it might roll that out in the future. This is a massive step towards a massive option regardless because it gives users of PayPal and crypto more scope. People are now going to be able to use their cryptocurrency on PayPal which will instantly be converted to US dollars.
The most important question at this stage is that what is in it for PayPal to take this jump?
Firstly, it will boost engagement, so the more often one is actually using the app the more business it generates for PayPal. For instance, when you are looking at your Bitcoin or paying through your Bitcoin, you are essentially spending more time on the app. This is called the super app effect, wherein you will be using the PayPal app more and more frequently. As frequent as your visits on the app would be, so would your purchases.
Secondly, if a lot of the people are going to use this option then eventually it might increase PayPal’s own profit margins. PayPal charges the same for merchants but doesn’t have to pay Visa, Mastercard or the banks, thus every likelihood that its margins increase.
Just this week Visa announced that it launched a US dollar-pegged stablecoin and now PayPal brings this news. Looking around the payments ecosystem right now we might be at an inflection point in terms of greater adoption of the cryptocurrency. This brings Bitcoin and other crypto tokens one step closer to becoming mainstream because now it is not just stored value. It is in fact value that can be used in a store. This change from stored value to a value you can use in-store is a huge thing. This is also being reflected in the price of Bitcoin and there are a lot of people betting on Bitcoin.
Similarly, last week Tesla had publicized that it was now accepting Bitcoin for its vehicles. The corporation’s website also gave detailed instructions on how payment through Bitcoin could be made.
According to Chief Executive Officer of PayPal, Dan Schulman the idea behind Checkout with Crypto is to push cryptocurrency into the mainstream. While doing this it also afforded PayPal consumers flexibility and choice in the mode of payment using PayPal wallet.
It must be noted that in 2018 PayPal’s competitor Square also initiated support for Bitcoin. However, PayPal launching the crypto as a mode of payment makes it a major digital wallet.