PayPal to start allowing users to pay with cryptocurrencies

PayPal is embracing cryptocurrencies as a means of payment.

According to a report by Reuters, PayPal will announce on Tuesday that it has started allowing customers in the U.S. to use crypto for payments.

The launch has been confirmed to Reuters by PayPal President and CEO Dan Schulman.

“This is the first time you can seamlessly use cryptocurrencies in the same way as a credit card or a debit card inside your PayPal wallet,” Schulman told Reuters.

More precisely, users will be able to pay using bitcoin, ether, bitcoin cash, and litecoin. The service will be available at all of PayPal's 29 million merchants "in the coming months." When making a purchase at a merchant that uses PayPal, users will be able to convert their crypto holdings into fiat currency at checkout — though it's unclear whether this will be automated or not. There will be no transaction fee at checkout, and users will only be able to use one type of coin per purchase.

The news comes amidst a heightened interest in cryptocurrencies from major companies and institutions. In February, Tesla bought $1.5 billion worth of Bitcoin, and a week ago, the company started offering its buyers in the U.S. the option to purchase vehicles using bitcoins. Just yesterday, Visa announced it would start using USDC, a stablecoin pegged to the value of U.S. dollar, to settle transactions with Visa on the Ethereum platform.

PayPal started allowing users to buy and sell cryptocurrencies in October 2020. Now, the company hopes this next step will prompt its customers to start using cryptocurrencies for making purchases, instead of merely holding them.

“We think it is a transitional point where cryptocurrencies move from being predominantly an asset class that you buy, hold and or sell to now becoming a legitimate funding source to make transactions in the real world at millions of merchants,” Schulman told Reuters.