US businesses with PayPal accounts will be able to facilitate crypto transactions after PayPal Holdings announced that they would enable business accounts to sell, buy, and hold crypto directly.
Cryptocurrencies have rarely been out of the headlines over the last few years and have been seen as a great investment opportunity, with many going to record significant growth.
While it has taken time, crypto has now reached a level where it is being more widely accepted by a variety of businesses, and PayPal has moved to accommodate this. PayPal’s move to embrace digital currencies will likely boost crypto usage rates among other businesses that will now find it easier to trade.
Paypal and Crypto
PayPal strives to create a seamless payment experience with fast transaction speeds. They want to allow their users to complete business transactions rapidly, which crypto can help them deliver.
This is not PayPal’s first foray into the crypto market as they began offering cryptocurrency to customers in 2020. This includes customers having the ability to make crypto payments for online purchases, with Bitcoin, Litecoin, Ethereum, and Bitcoin Cash all being accepted in US territories, excluding Hawaii.
PayPal made this move to provide a better customer experience due to the fast transaction speeds provided by cryptocurrencies. For example, crypto expert Sergio Zammit says that crypto casinos with instant withdrawals take between just 5 and 15 minutes to provide players with their winnings. This makes them an excellent choice in times like now, when instant gratification is more important than ever.Â
By embracing crypto, PayPal can, too, offer near-instantaneous transactions. The digital payment solution’s embrace of crypto has definitely helped it remain the most popular mobile payment app in the US. Currently, there are 278.10 million PayPal users in the US.
PayPal Stablecoin
Another option available to users is PayPal USD, their own stablecoin that was launched in 2023.
PayPal USD, also known as PYUSD, is a stablecoin that is pegged to the dollar and created in a way to maintain its value. The cryptocurrency is issued by the US-regulated custodian Paxos Trust Limited and can be used to send and receive payments, for online payments, and for point-of-sale payments.
PYSUD does not command fees to send, buy, sell, or hold and transactions can be carried out on the PayPal app or website. Users who want to convert PYUSD to other cryptocurrencies will be subject to conversion fees.
The purpose of PayPal USD is to bridge the game between web3 and fiat transactions and improve the efficiency of online payments.
What this Means for US Businesses
The ability to add another payment type for many businesses could be a huge boost and help to attract a new cross-section of the consumer market. Cryptocurrency is no longer just an investment opportunity, with many looking to it as a genuine alternative to fiat currencies.
Businesses and industries that adopt crypto payments will see a lot of benefits, including the lower transaction fees associated with crypto payments in comparison with traditional payment methods like credit cards.
Cross-border payments are made significantly easier and transaction speeds are an improvement over other banking methods. This can help businesses improve cash flow and expand into global markets without fears over exchange rates and delayed payments.
Enhanced security is another factor that will appeal to businesses with hacking and fraud significantly harder because of secure blockchain technology. Its transparency also adds a level of trust for consumers, helping brand reputation and trust.
The risk of chargeback fraud with consumers claiming false or fraudulent payments can leave businesses out of pocket. This risk is removed with crypto payments as they can’t be reversed.
Finally, businesses and industries that are open to crypto payments will appeal to tech-savvy consumers who recognize that the brands they are dealing with are forward-thinking and modern.
Presenting a brand as innovative and open to new technologies can improve brand perception and also help future-proof online businesses against consumer trends.
Paypal’s decision to allow crypto transactions in business accounts could prove to be a catalyst for the industry and encourage more acceptance.
