PayPal is one of the largest companies globally to enter the market for digital currencies with its announcement last October that it would allow its millions of U.S. customers to buy, hold and sell cryptocurrencies.
Paypal lays a valid claim as the original fintech startup. Twenty years after its launch, and a market capitalisation of $320bn, it’s now pivoting to crypto with a UK launch this week.
In October 2020 Paypal announced that it would allow U.S. customers to buy, hold and sell cryptocurrencies. In March 2021, the company launched 'Checkout with Crypto'— enabling customers in the U.S. to use their cryptocurrency alongside other payment methods in their PayPal wallet to make purchases at businesses around the world. In April, the company then introduced crypto services on its mobile payment service Venmo in the U.S.
Customers in the UK will now be able to buy, hold and sell cryptocurrency with PayPal, marking the first international expansion of PayPal's cryptocurrency service beyond the U.S. The minimum purchase is just £1.
So far, Paypal will only offer four types of cryptocurrencies—Bitcoin, Ethereum, Litecoin and Bitcoin Cash.
"The pandemic has accelerated digital change and innovation across all aspects of our lives— including the digitisation of money and greater consumer adoption of digital financial services," said Jose Fernandez da Ponte, Vice President and General Manager, Blockchain, Crypto and Digital Currencies at PayPal.
"Our global reach, digital payments expertise, and knowledge of consumer and businesses, combined with rigorous security and compliance controls provides us the unique opportunity, and the responsibility, to help people in the UK to explore cryptocurrency.PayPal says purchases will be able to be made with users’ bank accounts or debit card and funds from sales of crypto will “quickly” be able to be used via users accounts held in the Paypal app.
There are transaction fees and currency conversion fees for buying and selling applicable cryptocurrencies but no fees for simply holding them.
Paypal's crypto offering comes through a partnership with Paxos Trust Company, a fintech brokerage. PayPal's venture capital arm has also made some sizable investments into blockchain and cryptocurrency-related start-ups including TRM Labs, TaxBit and Talos.