PayPal backs exciting cryptocurrencies, predicts big decline in cash usage
The demand for cryptocurrency exceeded PayPal’s initial expectations following a major move by the firm last year.
PayPal announced in October that its customers would soon be able to use cryptocurrencies to shop at the 26 million merchants on its network.
It would also allow people to buy, sell and hold Bitcoin and other virtual coins using its online wallets.
“Demand on the crypto side has been multiple-fold to what we initially expected. There’s a lot of excitement,” PayPal President and CEO Dan Schulman told Time magazine.
He added: “Ten years from now, you will see a tremendous decline in the use of cash. All form factors of payment will collapse into the mobile phone.”
“Credit cards as a form factor will go away, and you will use your phone because a phone can add much more value than just tapping your credit card.”
Only a matter of time
PayPal’s crypto move came as no great surprise, according to Danny Scott, CEO at UK Bitcoin exchange CoinCorner.
“Earlier in the summer, they announced that they were looking at the option, having dropped out of the Libra association a little over a year ago,” he commented.
One of PayPal’s competitors in the US, Square, had seen revenue of $306 million in Q1 2020 surpassing its fiat revenue stream by around $100 million, he added.
“By the sounds of the functionality, PayPal’s service is very basic, meaning that it’s a closed loop - aka, you can’t withdraw your Bitcoin and use it elsewhere, or send your Bitcoin from outside of PayPal into their system,” Scott said.
Nonetheless, the announcement was a positive step forward for the crypto industry, and brought more credibility to the Bitcoin movement, he concluded.
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