What Happened?
PayPal is set to launch a new feature that allows merchants to accept payments in over a hundred types of cryptocurrencies. This move expands its market influence and enables small businesses to reach hundreds of millions of cryptocurrency users globally.
This new feature will bring significant benefits to merchants, especially in terms of cross-border transactions. Compared to traditional credit card payments, cryptocurrency transaction fees are only 0.99%, which is 90% lower than usual fees, greatly reducing operational costs for small businesses. Additionally, cryptocurrency payments allow for instant settlement, addressing the issue of traditional international transactions taking several days, thereby improving cash flow efficiency.
PayPal’s initiative is facilitated by the clarity of regulatory policies such as the U.S. GENIUS Act, which provides a regulated pathway for expanding its stablecoin services. Meanwhile, PayPal’s own stablecoin, PYUSD, has also seen rapid growth in market capitalization, indicating an increasing acceptance of stablecoin payments in the market.
PayPal’s Major Push into the Cryptocurrency Payment Market
Recently, PayPal announced that it will introduce a new feature allowing businesses to accept payments in over a hundred cryptocurrencies at checkout, simplifying cross-border transactions and expanding the use of its stablecoin, PYUSD.
This service is expected to be launched in the coming weeks, enabling merchants to accept cryptocurrencies such as Bitcoin, Ethereum, Tether (USDT), and USD Coin (USDC), and to support payments from mainstream cryptocurrency wallets like Coinbase, OKX, Phantom, and MetaMask.
When consumers pay with cryptocurrencies, these funds will be automatically converted into fiat currency or PayPal’s PYUSD stablecoin and deposited into the merchant’s account, effectively shielding merchants from the risks of direct exposure to cryptocurrency price volatility.
PayPal stated that the initial transaction fee for its cryptocurrency payments is 0.99% per transaction, which can save merchants up to 90% compared to traditional credit card processing fees (for example, Visa fees typically start at 1.75%). Furthermore, businesses that opt to convert their funds into PYUSD can earn approximately 4% on those balances.
Frank Keller, General Manager of PayPal’s enterprise and merchant platform, stated in an interview with Bloomberg, “There are 650 million users engaged in a $3 trillion cryptocurrency market globally, and we want to enable small businesses to access this growing customer base.” He noted that for small businesses accepting payments from overseas buyers, related costs can exceed 10%, and transaction settlement can take several days. In contrast, cryptocurrency payment transactions can settle instantly, greatly enhancing efficiency.
Market Demand and PayPal’s Long-Term Commitment
Keller emphasized that although cryptocurrency payments are still in the early stages, consumer demand for such payment options is growing at an astonishing rate. He believes, “When PayPal launches this feature, it will build trust.”
This launch also demonstrates PayPal’s long-term commitment to the cryptocurrency space, with Keller’s goal to integrate digital assets and blockchain more deeply into PayPal’s open platform.
Currently, this new feature is only available to U.S. merchants, excluding residents of New York. Notably, PayPal’s own stablecoin, PYUSD, has seen its market capitalization grow nearly 80% since January 1 of this year, rising from $497 million to $894 million, reflecting an increasing market acceptance.
PayPal’s move also follows its competitors, such as payment service providers Stripe and Coinbase, in simplifying global cryptocurrency payments.
Stripe launched a USD stablecoin payment option in October 2024 and partnered with Coinbase to integrate services that convert fiat currency into cryptocurrency on both platforms.
Coinbase has offered Coinbase Commerce since 2018, allowing merchants to accept cryptocurrencies on platforms like Shopify and WooCommerce. In 2024, Coinbase released the x402 protocol, allowing automated systems to send and receive stablecoins on the Base network.
The launch of PayPal’s new feature is also supported by the recently passed GENIUS Act, which provides a more explicit regulatory framework for the expansion and integration of stablecoin services for companies like PayPal.
Globally, small businesses are increasingly accepting cryptocurrency payments. Industries such as food and beverage, retail, travel, e-commerce, and even real estate are gradually beginning to accept cryptocurrency payments to leverage their speed and low cost advantages.
Reference: cointelegraph, bloomberg