Payments giant PayPal now allows its U.S. customers to use cryptocurrency from their PayPal wallet as a form of payment at millions of its online merchants around the globe, the firm said in a press release on 30 March.
According to the announcement, the new service will enable customers to use one of PayPal’s approved digital assets — Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH) — to make purchases at checkout. Called “Checkout with Crypto”, the system will see merchants receive the funds directly in fiat, after the cryptocurrencies are “safely and easily” converted at the point of sale. The president and CEO of PayPal, Dan Schulman, said in a statement:
“As the use of digital payments and digital currencies accelerates, the introduction of Checkout with Crypto 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. Enabling cryptocurrencies to make purchases at businesses around the world is the next chapter in driving the ubiquity and mass acceptance of digital currencies.”
Customers will be able to use only one type of crypto at the point of each sale, with the “Checkout with Crypto” option appearing in their PayPal wallet only if they have sufficient balance to cover the purchase. The firm has also stated that the new service will not incur any additional transaction fees, making crypto a “legitimate funding source to make transactions in the real world”.
The “Checkout with Crypto” terms and conditions state that any purchases made with the new system are taxable, just like all other sales of crypto assets. Even though PayPal will provide its customers with a 1099 tax form and report to the IRS as necessary, it is up to the customer to determine what taxes apply to the transactions made.
The payments giant first revealed its intention to allow its customers to buy and sell crypto back in October 2020, when it partnered with the Paxos Trust Company. Since then, the company has increased the weekly crypto purchase limits of its customers twice, with the initial limit of $10,000 being boosted to $20,000 per week. PayPal continued its expansion into the crypto space, and earlier this month acquired digital assets security firm Curv for “less than $200 million”.
The new PayPal service was announced only a day after Visa announced a crypto payments pilot program, that will use the USDC stablecoin to settle fiat transactions using the USDC stablecoin. While Crypto.com will be the first to trial the new Visa system, other Visa crypto partners will have to option of using it “later this year”.