Coinbase, the largest crypto exchange based in North America, announced today that it will now open crypto purchases on its platform to its users who are also registered with PayPal.
“Buying crypto should be simple and easy. However, moving money in the traditional world of finance can be anything but. ACH and wire transfers can take time and effort, and we know you are expecting faster and more seamless ways to make crypto purchases. Now, you can instantly fund crypto purchases with PayPal in just a few taps,” shared PayPal Product Manager Eddie Lo through a blog post regarding the new service.
The crypto exchange notes that this service is only available to U.S. residents who have verified accounts for both Coinbase and PayPal. By integrating with PayPal as a payment option, the crypto exchange would help users ease into its platform and offer instant fund exchanges without adding bank account information or credit card numbers directly to the exchange’s user database. Historically, Coinbase has provided U.S. users with PayPal selling functions since 2016, with withdrawals to PayPal opened in 2018.
Coinbase notes that this service is limited to daily purchases of up to $25,000. At the time of writing, only four cryptocurrencies are available through this service: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH).
“We are moving into the era of digital currencies, and those digital currencies hold tremendous promise, whether these are cryptocurrencies or central bank digital currencies,” said PayPal CEO Dan Schulman. “I believe digital currencies can increase the utility of payments and make the financial system more inclusive and less expensive,” Schulman added.
Costs to run and process this payment option is one of Coinbase’s higher priced tiers, with a 3.99% fee on top of the purchase. Bank payment fees on Coinbase have been subject to criticism as it racks up some 1.49% of the total purchase, while deposits from a PayPal USD account into Coinbase tacks some 2.5% on a crypto bill. Automated clearing house (ACH) transfers, however, are free.
Running numbers, it can be said that this integration would drastically expand the reach of Coinbase, which currently has some 56 million users globally. PayPal, on the other hand, has over 305 million users as of 2020. Coinbase plans to expand this crypto purchase offering to more countries. Earlier this month, PayPal’s peer-to-peer mobile payments app, Venmo, also opened crypto purchases to its 77 million users. Both PayPal and Coinbase are publicly listed on Nasdaq as PYPL and COIN, respectively.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.