14 DAY TRIAL // PayPal is slowly opening up to embrace bitcoin, which is a huge step for the payment processor.
PayPal announced on Tuesday that it was partnering up with payment processors BitPay, Coinbase and GoCoin. While this isn’t exactly adopting bitcoin, it’s an important step nonetheless.
PayPal won’t be processing any of the payments made with BTC, but it will allow some merchants to start accepting bitcoin easier, although it has decided to limit the use of the virtual currency to digital goods.
“PayPal has always embraced innovation, but always in ways that make payments safer and more reliable for our customers. Our approach to Bitcoin is no different. That’s why we’re proceeding gradually, supporting Bitcoin in some ways today and holding off on other ways until we see how things develop,” Scott Ellison, senior director of corporate strategy, said.
This means that if things go well, we could soon see PayPal fully embracing Bitcoin, although the moment may be some distance away.
Ellison points out that they’ve already taken some steps to accept Bitcoin, such as the new capability of its own service Braintree, which was announced earlier this month. Through this agreement, Braintree will start accepting Bitcoin payments through their v.zero SDK and the relationship with Coinbase.
North American merchants will be the first to enjoy Bitcoin payments
For starters, PayPal clients in North America will gain access to the new Bitcoin capabilities, although we should see the feature expanded to other areas in the coming months.
“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,” Ellison added as a way to explain why PayPal chose these three companies.
Even though PayPal won’t be doing any of the payment processing right now, it’s still a great step to offer digital goods merchants an easy way to accept Bitcoin, especially as the virtual currency is becoming more widespread. The company has already helped merchants selling Bitcoin mining equipment to accept PayPal payments, but in an effort to safeguard customers they’ve decided not to work with merchants who pre-sell these products.
There’s also the issue of local legislation and regulations, which PayPal needs to know about for every market they operate in. Since Bitcoin has been banned in some countries and welcomed in others, things are a bit complicated.