PayPal Holdings Inc. caused a stir last month when it announced that it will enable users in the U.S. to buy, sell and hold cryptocurrency via their accounts. But it is by no means a first for U.S. cards and payments majors. Square Inc. has allowed users to transfer cryptocurrency since 2018, while Visa Inc. and Mastercard Inc. have both ramped up their cryptocurrency debit card plans in recent years. Cryptocurrency may appear to be a niche or even experimental segment for these companies, but they are treating it with increasing seriousness, according to industry experts.
Customers of PayPal in the U.S. will be able to start transacting cryptocurrency from their digital wallets “in the coming weeks,” while customers of subsidiary Venmo LLC and PayPal users in “select international markets” will be able to do the same in the first half of 2021, the company said in October. PayPal customers will initially be able to transact in Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
The motivations to enter the cryptocurrency space include the potential to boost revenues, as Square has done with its Bitcoin offering, industry observers told S&P Global Market Intelligence. Payments majors are also watching the growing interest that central banks have taken in creating their own digital currencies, or CBDCs.