PayPal Begins Cryptocurrency Checkout Service

PayPal announced today that it is launching a feature that will allow customers to pay online merchants with cryptocurrencies.

The new feature, called "checkout with crypto" is rolling out today for its customers in the United States, according to PayPal CEO Dan Schulman. The service will be available at all of its 29 million merchants in the coming months, the company said.

After rolling out the ability for users to directly buy and sell cryptocurrency directly from their accounts last November, PayPal’s new “Checkout with Crypto” allows users to instantly convert their Bitcoin, Ethereum, Litecoin, or Bitcoin Cash to US dollars (with no additional transaction fees) that PayPal then uses to complete the transaction. If a merchant doesn’t take US dollars, PayPal also converts those dollars into local currency at standard conversion rates set by PayPal.

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As the use of digital payments and digital currencies accelerates, the introduction of Checkout with Crypto continues our focus on driving mainstream adoption of cryptocurrencies while continuing to offer PayPal customers choice and flexibility in the ways they can pay using the PayPal wallet," said Dan Schulman, president, and CEO, PayPal. "Enabling cryptocurrencies to make purchases at businesses around the world is the next chapter in driving the ubiquity and mass acceptance of digital currencies."

The feature will automatically appear in the PayPal wallet if a user has a “sufficient cryptocurrency balance to cover an eligible purchase,” and you’ll be able to see your crypto balances for each kind of coin in the app. However, you can only use one type of cryptocurrency for each purchase you make.

PayPal won't actually pay merchants in digital currency. Instead, it will convert bitcoin and other cryptocurrencies into dollars or the traditional currency of the merchant's choice. The company plans to charge a conversion fee equal to about 0.5% of the transaction price.

The process of selling users' digital currency, converting it into government-issued currency, and paying that to the merchant takes less than three seconds, Schulman said. That helps ensure there won't be any risk of volatility for merchants or consumers, he said.

Checkout with Crypto builds on the ability for PayPal users to buy, sell and hold cryptocurrencies, which the San Jose, California-based payments company launched in October.