Evan Agostini/AP
- PayPal told Reuters that it was now letting US consumers use cryptocurrency holdings to pay online.
- Customers can use bitcoin, ether, bitcoin cash, or litecoin in their PayPal digital wallets to pay merchants.
- CEO Dan Schulman told Fast Company he made the first cryptocurrency purchase, buying a pair of cowboy boots.
- See more stories on Insider's business page.
PayPal has started allowing US consumers to use their cryptocurrency holdings to pay at millions of its online merchants globally, it announced Tuesday.
Customers who hold bitcoin, ether, bitcoin cash, and litecoin in PayPal digital wallets would now be able to convert their holdings into fiat currencies at checkouts to make purchases, the company told Reuters.
President and CEO Dan Schulman told Fast Company he made the first official purchase using the new checkout system, buying a pair of cowboy boots.
The service, which PayPal revealed it was working on late last year, started rolling out on Tuesday, and would be available to all US customers "over the next few weeks," Schulman said.
Customers can already use it at half of PayPal's 29 million merchants across the world, he added.
"This is the first time you can seamlessly use cryptocurrencies in the same way as a credit card or a debit card inside your PayPal wallet," Schulman told Reuters.
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.
The offering made PayPal one of the largest mainstream financial companies to open its network to cryptocurrencies and helped fuel a rally in virtual coin prices.
Bitcoin has nearly doubled in value since the start of this year, boosted by increased interest from larger financial firms that are betting on greater adoption and see it as a hedge against inflation.
PayPal's launch comes less than a week after Tesla said it would start accepting bitcoin payments for its cars. Unlike PayPal transactions, where merchants will be receiving fiat currency, Tesla said it will hold the bitcoin used as payment.
Still, while the nascent asset is gaining traction among mainstream investors, it has yet to become a widespread form of payment, due in part to its continued volatility.
PayPal hopes its service can change that, as by settling the transaction in fiat currency, merchants will not take on the volatility risk.
"We think it is a transitional point where cryptocurrencies move from being predominantly an asset class that you buy, hold and or sell to now becoming a legitimate funding source to make transactions in the real world at millions of merchants," Schulman told Reuters.
The company said it would charge no transaction fee to checkout with crypto and only one type of coin could be used for each purchase.