Starting next year,
PayPal Holdings Inc. (NASDAQ:PYPL) will let users use their
cryptocurrency holdings to pay for goods and services at 28 million merchants. The service will not result in any incremental fees for either consumers and merchants. In addition, the payment giant is also planning to enable Venmo users to buy and shop using cryptocurrencies.
PayPal Cryptocurrency Services
Cryptocurrencies integration is in response to their growing popularity, a drive that has seen central banks embrace them as well. PayPal is among a number of payment companies that remain bullish about cryptocurrencies. Square has already invested $50 million in Bitcoin.
On a broader scale, the payment companies have started working with central banks in experimenting with cryptocurrencies as well as the utility of digital wallets. The digital wallets are seen as a breakthrough, given that they offer the same services as payment apps offered by Apple Inc. (NASDAQ:AAPL) and Google. PayPal, on its part, is betting on blockchain-powered cryptocurrency systems as they tend to be tamper-proof.
While PayPal's actions are expected to accelerate cryptocurrency mainstream adoption, they are not the only ones fuelling the drive. Cryptocurrency exchange, Coinbase has already unveiled a debit card that allows people to use their cryptocurrency holdings at ordinary merchants. MasterCard, on its part, has unveiled a service that lets central banks test digital currencies.
The only tailwind standing in the way of accelerating cryptocurrency adoption is the fact that the Internal Revenue Authority treats the crypto transaction as a taxable event. The risk of additional charges in the form of taxes could derail the use of cryptocurrencies in merchant shops.
Earnings Top Estimates
Separately, PayPal reported third-quarter financial results that topped analyst estimates. Revenue edged past Wall Street targets as the company benefited from a boom in e-commerce amid the pandemic.
PayPal earnings were up 41% on an adjusted basis to $1.07 a share, with revenues increasing 25% to $5.46 billion. Total payments rose 38% to $247 billion against $232 billion expected. During the quarter, PayPal added 15.2 million net new active accounts. The company exited the quarter with $361 million active accounts.