According to Coindesk, PayPal plans to launch the business of directly selling cryptocurrencies to its users and launch a built-in wallet function for storing cryptocurrencies. The new program will be launched within three months, or even earlier. The article also reports that PayPal will work with"Multiple exchanges cooperate to obtain liquidity", of which Coinbase is a viable potential collaborator. Another popular payment service provider in the United States, Venmo, is also rumored to be competing with PayPal in the crypto business.
image description
Source: Square Inc., Bybit Insight
image description
Source: Square Inc., Bybit Insight
While the gross profit contribution is limited, the net profit contribution from bitcoin services is considerable. Cash App charges a 2.2% fee on Bitcoin transactions, and the resulting cost is negligible. The cost of buying and selling cryptocurrencies mainly includes transaction fees and custody fees. On Coinbase, large traders have transaction fees as low as 0 for maker orders and as low as 0.04% for taker orders. Custody fees on Coinbase are 0.5% per annum.
image description
Source: Square Inc., Bybit Insight
Cash App’s user base is estimated at just under 30 million, while the crypto exchange Coinbase, which has the largest number of customers, has just over 30 million accounts. What about PayPal?
image description
Source: 1Q20 Investor Presentation, PayPal
Regardless of the profitability of encryption services, it is not surprising that PayPal will enter the encryption business field. During his tenure as PayPals president, David Marcus was already a big fan of Bitcoin. Back in 2013, Marcus predicted that Bitcoin has the potential to revolutionize commerce. He was so ahead of his time, and 7 years later, it seems PayPal is finally ready to link Bitcoin to its accounts. As PayPal agreed to withdraw legal currency from Coinbase to PayPal accounts in 2018, its pace of entering the encryption field has gradually accelerated. Recently, PayPal has repeatedly expressed its interest in blockchain and continues to hire experts in the field.
Click here to read the original text
