Online payments giant PayPal doesn’t buy into the hype that Bitcoin is the future of finance, but it does see how blockchain and cryptocurrency technology can revolutionize the finance space.
Explaining the company’s lack of faith in Bitcoin, PayPal CEO Dan Schulman pointed to how the cryptocurrency and others like it have so far failed to achieve true penetration with major retailers.
“We’re not seeing that many retailers at all accept any of the cryptocurrencies,” he said.
While niche retailers and even some big online companies are already starting to accept crypto payments, giants like Amazon have so far been resistant to change.
Despite Schulman’s point, some pundits posit that PayPal’s skepticism stems more from the fact that it views Bitcoin and other cryptocurrencies as stiff competition.
Bitcoin, crypto is competition
Payment fees, in particular, are a big point of contention. Bitcoin transaction fees may have gone up in the past couple of years, but they’re still relatively negligible compared to PayPal’s.
PayPal charges up to five percent on most goods- and service-based transactions. If you receive $100 as payment over PayPal, for example, you actually receive only around $95 depending on the transaction. International payments also have a service charge, the amount of which depends on your country, on top of PayPal’s cut.
And if Bitcoin’s transaction fees aren’t enough to sway crypto users away from PayPal, there are also alternative cryptocurrencies such as Monero, which boasts even smaller fees and comes with additional privacy safeguards in place.
PayPal still wants blockchain, crypto tech
It’s a different story when it comes to blockchain and other cryptocurrency technology, however. John Rainey, PayPal’s chief financial officer, has stated that the company “doesn’t want to miss out” and already has a few projects in the pipeline.
“We have teams clearly working on blockchain and cryptocurrency as well, and we want to take part in that in whatever form that takes in the future,” he said. “I just think it’s a little early on right now [for Bitcoin].”
Although Bitcoin is still vulnerable to price swings and market volatility, the cryptocurrency has recently enjoyed a steady surge in market price, making it all the harder to ignore its presence in the finance space.
And with PayPal already working on cryptocurrency technology, perhaps the company will pull a JPMorgan and release its own crypto token instead.