In a surprise move, PayPal is planning to open the buying and selling of cryptocurrencies in the US. For this, it has partnered with Paxos Crypto Brokerage. PayPal plans to support Bitcoin, Ethereum, Bitcoin Cash, and Litecoin at first. While PayPal will provide the platform related support, Paxos will take care of trading and custody. The service is expected to launch in early 2021. PayPal will also let you use your crypto assets as a funding source for your PayPal purchases. This could be an excellent way to use cryptocurrencies for everyday purchases without converting cryptocurrencies on an exchange first.
There are 26 million merchants that offer PayPal around the world. For those merchants, customers paying in crypto won’t have any impact. Everything will be converted to fiat currency when a transaction is settled. PayPal has also been granted a conditional BitLicense by the New York State Department of Financial Service. It should be able to launch its crypto service in partnership with Paxos in New York.
PayPal’s crypto service is already rolling out slowly. You can head over to PayPal’s website now and join the waitlist. The service will be public for everyone by next month. The company has already updated its fees with more details about cryptocurrency exchange fees. However, PayPal fees on fiat-to-cryptocurrency and cryptocurrency-to-fiat exchange transactions will be high. You can expect to pay 2.3% for transactions below $100, 2% for transactions between $100 and $200, 1.8% for transactions between $200 and $1,000 and 1.5% for transactions above $1,000. There will also be a minimum fee of $0.50 for transactions below $25. The page also says there will be some spread between buy and sell prices. For luring more customers, the fees will be waived until 2021.