Payment giant PayPal now allows U.S.-based customers to pay merchants in cryptocurrencies. The new system dubbed “Checkout with Crypto” will feature a service where users can pay for authorized vendors’ goods and services employing their stored coins. Moreover, the system will see merchants receive equivalent funds undeviatingly in fiat currency after coins are subjected to a quick transfer at the time of sale. PayPal will allow users to pay with ether (ETH), bitcoin (BTC), Bitcoin Cash (BCH), and Litecoin (LTC).
The crypto checkout service will be accessible for all four of PayPal’s supported crypto upon launch. After enabling U.S. users to purchase and sell crypto directly from their accounts last November, PayPal’s new service enables users to instantly convert their BTC, ETH, LTC, or BCH to U.S. dollars. If a merchant doesn’t accept U.S. dollars, PayPal also swaps those dollars into local currency at standard conversion rates set by PayPal. It also incurs no extra transaction fees. Additionally, the users can employ only one type of crypto per transaction.
PayPal’s Crypto Checkout Service Comes With its Own Sets of Terms and Conditions
Despite it initially rolling in the U.S., PayPal’s FAQ page contends that it plans to expand its crypto offering to select global markets in the first half of 2021. Moreover, the terms and conditions for “Checkout with Crypto” include several significant warnings. Foremost amongst them is the tax liability. It states that crypto-assets sales through the checkout with crypto are taxable like all other sales of crypto assets. PayPal will also offer the customer a 1099 tax form and detail to the U.S. IRS (Internal Revenue Service) as needed. However, it further states that the user’s responsibility is to decide the taxes, if applicable, on the transaction executed.
Furthermore, the PayPal news occurs within 24 hours of the announcement by Visa. Visa declared that it would pilot a new payments system employing stablecoins on the Ethereum blockchain. The pilot will witness participating merchants agree to resolve consumers’ fiat transactions utilizing the USDC stablecoin. PayPal is not the first payment app to extend support for cryptocurrency. In 2018, its opponent, Square, advocated support for Bitcoin on the Cash App. However, the launch of crypto as a form of payment makes PayPal a prominent digital wallet and a crypto exchange, streamlining crypto adoption as a more common payment method.