Starting with US-based customers and merchants, the global payment processing company’s new ‘Checkout with Crypto’ provides a conduit to convert value in Bitcoins and three other digital currencies into government-backed dollars to complete purchases.
During checkout, customers with cryptocurrency holdings in their PayPal accounts will see the option to apply their balance to complete the purchase if they hold sufficient value at current dollar exchange rates. They can then select that option, and PayPal will manage the process of moving bits out of their digital wallet and clearing the transaction. PayPal performs an exchange via Paxos, at a rate based on the spot market. The exchange rate builds in a 0.50% spread. PayPal then remits the dollars to the merchant’s account under its normal terms.
The crypto option is now available for use with more than half of PayPal’s US merchants. For merchants, there’s no difference in the value they receive, including the fact that PayPal charges its standard commercial transaction fee, collecting 2.9% plus 30¢ in the US.
The supported currencies for wallets are the same as for purchases: Bitcoin, Bitcoin cash, Ether, and Litecoin. Purchases can’t mix and match those currencies but must be made entirely from one type at present, and cryptocurrency used for payment must be purchased within a customer’s PayPal account.
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