The Chief Financial Officer of PayPal has said that it isn’t pursuing cryptocurrencies as a funding source with great vigour because merchants haven’t adopted them as a payment method. He blames crypto volatility as the reason why merchants are reluctant to take payment via the likes of Bitcoin.
John Rainey says that merchants haven’t been keen to adopt but that didn’t mean that PayPal wouldn’t reassess the issue in future.
PayPal did start taking Bitcoin payments back in 2014 and then it bought Braintree which had significant crypto connections and merchants then had the option to opt-in if they wanted to receive funds in cryptocurrency for their goods and services. They developed partnerships with BitPay, GoCoin and Coinbase.
If you’re a merchant and you have, let’s say, a 10 percent margin on a product that you sell and you accept Bitcoin, for example, and the very next day it moves 15 percent, you’re now underwater on that transaction. So what happens, or what was happening, is they were immediately moving that to a more stable currency. You could have something that appeals to consumers, but if merchants don’t accept it, it’s of little value… Right now, we don’t see a lot of interest from our merchants. But if it’s something that stabilizes in the future and is a better currency, then we’ll certainly support that.
– John Rainey, CFO, PayPal
Rainey’s assessment chimes closely with the anecdotal experience that we hear at Tamebay: merchants are unconvinced. It is hardly surprising that business sellers want greater certainty and stability when they are protecting their livelihoods. It also seems fair to note that there is often a general sense of bewilderment related to crypto, and what they actually are, amongst the general merchant population.
That said, it’s positive that PayPal is keeping a watching brief and is open to future developments. It could well be that cryptocurrencies will become more generally accepted and understood in the years to come. And PayPal will doubtless be ready to help.