Mainstream Adoption of Cryptocurrency Payments by PayPal, Lowering Costs and Boosting Global Trade
PayPal Holdings, Inc. has announced a new initiative that aims to revolutionise global commerce - the Pay with Crypto platform. This service, available through PayPal and Venmo, allows users to buy and sell digital assets known as PayPal USD (PYUSD) at a rate of $1.00 per PYUSD.
For over 25 years, PayPal has been a pioneer in commerce, offering innovative experiences for consumers and businesses in approximately 200 markets. Now, with Pay with Crypto, they are taking a significant step forward.
PayPal USD is fully backed by U.S. dollar deposits, U.S. Treasuries, and similar cash equivalents. It is issued by Paxos Trust Company, LLC, a New York State Department of Financial Services (NYDFS) licensed entity, and PayPal, Inc. is also licensed to engage in Virtual Currency Business Activity by the NYDFS.
The transaction rate for Pay with Crypto via PayPal is 0.99%, resulting in a cost reduction of up to 90% compared to international credit card processing fees, including currency conversion fees applied by leading payment processors.
International credit card processing fees typically range from about 3% to 4% or more per transaction. These fees often include additional costs for cross-border transactions and currency conversion that can make international sales expensive for merchants. Pay with Crypto, on the other hand, supports over 100 cryptocurrencies and wallets, aiming to facilitate near-instant settlement and seamless international transactions.
By enabling instant conversion from cryptocurrencies to stablecoins or fiat currencies, Pay with Crypto significantly lowers fees and simplifies cross-border sales. The platform targets a $3+ trillion market, benefiting merchants who often face high costs accepting payments internationally.
Traditional credit card fees also include multiple intermediaries and currency conversion spreads, which Pay with Crypto effectively bypasses or reduces, hence the large fee savings.
It's important to note that the PYUSD rewards rate is subject to change and the current rewards rate is not specified. Reserves for PYUSD are fully backed by U.S. dollar deposits, U.S. Treasuries, and similar cash equivalents.
PayPal Media Relations can be contacted at [email protected] for further information. The original content can be found at https://www.prnewswire.com/news-releases/paypal-drives-crypto-payments-into-the-mainstream-reducing-costs-and-expanding-global-commerce-302514424.html.
As of today, PayPal has not received NYDFS approval for any materially new product or service for New York residents.
Comparison Table:
| Payment Method | Approximate Transaction Fee | Key Feature | |---------------------------|-------------------------------------------------|-----------------------------------------------| | International Credit Card | ~3% to 4% (plus currency conversion fees) | Multiple intermediaries, complex currency conversion, slower settlement | | Pay with Crypto (PayPal) | 0.99% | Near-instant settlement, supports 100+ cryptocurrencies, low fees, crypto to fiat/stablecoin conversion |
In conclusion, Pay with Crypto significantly lowers transaction costs for international sales compared to direct credit card processing, primarily by reducing currency conversion fees and simplifying the payment settlement process.
Technology plays a pivotal role in PayPal's innovative approach to commerce with the introduction of the Pay with Crypto platform. This initiative employs advanced technology for instant conversion from cryptocurrencies to stablecoins or fiat currencies, facilitating near-instant settlement and seamless international transactions.
