PayPal was created in the late 90s, and since then, it has led the market it has pioneered. E-wallets weren’t a thing people knew they needed back in the old days of commercial internet. Sure, there was already something in the air in 1997 when Coca-Cola tried a system that allowed people to buy from vending machines via SMS. Still, what was about to come was way bigger: now, it’s an industry worth over $7 billion.
The fintech environment changes fast, though. Constant updates of technologies and services are mandatory for companies in this competitive market. Yet, PayPal took quite a long time to include cryptocurrencies on its menu. How important are cryptocurrencies for PayPal?
Follow the Leader?
Not many people took cryptocurrencies seriously when Bitcoin was launched in 2009. Indeed, the first transaction using Bitcoins to buy real-life stuff involved a lot of bargaining. At the end of the negotiations, two pizzas were sold for 10,000 BTC, or 2,668,150,000,00 USD, according to recent values.
Cryptocurrencies were still a thing for a few enthusiasts and would soon prove highly volatile. Perhaps too volatile for big companies like PayPal. Neteller, one of PayPal’s main rivals, jumped into the Bitcoin wagon in 2018. Neteller allows its users to buy Bitcoins and other cryptos in their platform using one of the fiat currencies supported by the company.
There have been e-wallets treating cryptos like fiat currency since 2017. Payza eWallets premiered the service. The leader in fintech innovation was lagging behind its competitors.
How Important is iGaming?
PayPal finally implemented the service in 2022, and it’s now also an option for those who want to store, buy and sell cryptocurrencies. The service “Check Out With Crypto” was made available to US customers in 2021. It’s a significant step since we’re talking about a market giant with over 420 million users worldwide. So, now you can drop by top PayPal casinos and use your cryptos for gambling.
Crypto usage is rising fast among online gamblers, and the online gambling market is huge, having crossed the USD 63 billion mark in 2022. This market is expected to grow until at least 2031 at an annual compound rate of 11.7%. It means that any company providing solutions for this industry has solid chances of growing with it. PayPal isn’t alone on this table, where heavy-weight rivals like Skrill and Neteller fight for the same clientele.
E-wallets are already widely popular in online casinos and sportsbooks. They often have advantages over traditional methods, such as instant withdrawals and costless transactions. Combining top e-wallets and cryptocurrencies is bound to create even more convenient payment methods.
eCommerce and Banking Services
Cryptocurrencies were born online and are perfect for online transactions. The rise of crypto ownership worldwide is followed by a natural increase in online payments using this method. According to recent stats, about 80% of crypto owners use them for online and in-store shopping.
If cryptos were only for tech products or virtual goods in the past, the possibilities are nearly limitless these days. Companies like KFC, Microsoft, and HomeDepot now operate with cryptos. Cryptos are getting more common in countries where the banking system is insufficient or unreliable. Cryptos made online transactions easier and more accessible for consumers that wouldn’t have access to banking services otherwise.
A two-year market research published by Statista led to some interesting conclusions. The inefficiency or inaccessibility of the banking system in developing countries is driving more people to resort to digital payment solutions for online transactions where no bank account is involved.
Two countries adopted Bitcoin as an official fiat currency: Central Africa Republic (CAR) and El Salvador. Honduras has also created a special zone in a tourist destination where Bitcoins are accepted as legal tender. Although most developed countries seem unlikely to embrace cryptos in such a manner any time soon, the tale of CAR and El Salvador says a lot about the expanding potential of cryptocurrencies.
Although PayPal took a bit longer to catch the crypto train, the service is finally available. Despite the delay, the company’s leadership remained unchallenged in the more than 200 countries where it operates. However, PayPal is no longer one step behind its competitors regarding cryptocurrencies. Now, it’s an influential player in this market.
The ownership of crypto assets is on the rise around the world, reaching record numbers yearly. PayPal has the means and know-how to make the best of this trend and grab a sizable slice of the fast-growing pie of the crypto economy.