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PayPal Embraces Bitcoin: Is It Only the Beginning?

Op-ed - PayPal Embraces Bitcoin: Is It Only the Beginning?

PayPal announced a monumental partnership today that will likely play a large part in the adoption of bitcoin throughout the world. The company has partnered with BitPay, Coinbase, and GoCoin to provide bitcoin support to the millions of PayPal users.

The first project consists of integrating with the company’s Payments Hub, which is likely to be a small piece of the puzzle in the future relationship between PayPal and the leading Bitcoin payment solutions providers. Initially, digital goods merchants in North America will be able to accept bitcoin through the Payments Hub, and depending on popularity, may allow merchants around the globe to do the same.

PayPal announced in its press release, “We chose to work with BitPay, Coinbase and GoCoin because of our commitment to offering innovative and safer ways for businesses to accept payments. All three companies have taken steps to ensure that they know their customers and that those customers are offered certain protections. We believe digital goods merchants will be excited to work with these industry-leading companies to sell ringtones, games and music and get paid with Bitcoin.”

What’s it all mean?

This news does not necessarily mean that PayPal is adding the cryptocurrency into its digital wallet, nor does it mean that Bitcoin payments will be processed using its platform. Instead, this appears to be a foray into what has quickly become the most popular digital currency. If growth is noticeable, however, PayPal could be rolling out bitcoin support throughout other services.

This is yet another example of the power of Bitcoin technology. Each partnering company has taken steps to ensure that they know each customer and that customers are offered certain protections. PayPal is proceeding gradually though, but has obviously realized the value of Bitcoin, not only its simplistic payment methods, but also its transaction security and safety.

What the partnership has made possible is an easy way for merchants to test this popular payment method. More importantly, PayPal has long been one of the most established merchant solutions in the payment space, and because of the developed relationship with leading bitcoin businesses like BitPay, Coinbase and GoCoin, a wider range of users will be able to see the value of bitcoin; both as a payment method and technology.

The company has been helping merchants selling Bitcoin miners accept PayPal payments for quite a while. However, to help safeguard customers, PayPal is not offering the bitcoin payment option to merchants who pre-sell products. Meaning, when a company asks for funds up front for a product or service.

Only the beginning

“We believe Bitcoin offers unique opportunities as more people and businesses experiment with it. We are excited to work with businesses and business models that allow us to offer new experiences and the trusted service our customers expect. We hope to do more with Bitcoin as its ecosystem continues to evolve.”

Excitement mounted early this month when PayPal announced that businesses working with Braintree would soon be able to accept bitcoin payments. Is this a sign of what’s to come? Who knows, but it’s only the beginning. PayPal has thrown down the gauntlet. Who else will support Bitcoin and embrace innovation?