- Venmo announced credit card users can now opt to convert cash-back into crypto for free directly.
- Users can opt to convert FIAT into BTC, ETH, BCH, and LTC
- PayPal’s take on cryptocurrencies is one catalyst for rushing mass adoption as it places crypto in people’s hands.
- CEO Dan Schulman expected demand for cryptocurrencies to increase during the pandemic.
Credit cardholders have always been rewarded with perks for continuously using a card, whether they are in the form of a cash-back, air miles, or rewards. The ultimate goal is for consumers to perceive their credit card as the preferred payment method as it benefits the provider. As cryptocurrencies take hold of the market, financial services adapt their offering to meet users’ digital demands.
Venmo Makes Crypto Even More Accessible
PayPal’s business strategy includes making cryptocurrencies easy to obtain after allowing users to purchase and spend cryptocurrencies. In recent events, Venmo has rolled out “Cash Back to Crypto” a feature that lets credit cardholders opt-in and programs their cash-back to be converted into crypto without fees.
Cryptocurrency offerings are rolled out only in the U.S. and allow digital wallet owners to swap their FIAT for BTC, ETH, BCH, or LTC. Dan Schuman projects PayPal will become an “inclusion” financial service after allowing users to spend their crypto through “Checkout With Crypto” and build cryptocurrencies into people’s wallets, reducing buying friction.
The Venmo credit card launched in 2020 and the crypto cash-back capacity could increase credit card acceptance. What differs is that users can opt for the service without incurring any transaction fees. Robinhood trading platform also promotes fee-free crypto trades, while Coinbase, the crypto-oriented platform, has the highest transaction fees on the market.
To that end, PayPal aims to capitalize on an emerging trend by facilitating crypto to users without the need to externalize the process, making crypto integration and usage more straightforward and affordable.
On The Flipside
- PayPal has a bad reputation because it wants to operate as a bank without regulatory measures, safety, funds, or customer service.
- Venmo’s payment volume is still insignificant compared to that of the parent company.
- Venmo’s one-year growth amounted to 63%, while the overall company average was 43%.
- Venmo is currently only available for U.S. customers, thus reducing PayPal’s crypto efforts.
A Crypto PayPal innovation match.
Digital and non-digital payment providers are acknowledging cryptocurrency’s insertion into the daily fabric of the youthful society, with Visa and Mastercard going head to head to gain hegemony over the growing crypto sphere.
PayPal’s crypto effort comes as no surprise as the platform has already innovated by creating one of the first digital wallets, encompassing 375 million consumers and merchants in 200 markets. In addition, Dan Schulman argued, PayPal has been eyeing “digital forms of currency” for several years. However, he only considered them a currency as the industry evolved, contradicting researchers and governors’ ideas that Bitcoin can’t perform currency functions due to its heightened volatility.
“Buy With Crypto” is set to be released in the U.K., following a string of regulatory measures making the process seemingly integrated. Additionally, PayPal increased its weekly crypto purchases five-fold from $20,000 to $100,000 while also scrapping off the yearly $50,000 purchase limit. Yet, the company allows a limited number of cryptocurrencies to be purchased, limiting user’s choices.
Why You Should Care?
Placing cryptocurrencies in people’s hands without any friction and fees can speed up mass adoption. While it will not incentivize users to spend their cryptocurrencies immediately, it begins by forming a new habit of making cryptocurrencies more accessible and easy to understand for everyone using Venmo.