Bitcoin and other crypto are progressing towards mass adoption faster than you think – mostly thanks to visionary financial companies like the three we’ll describe below.
ePayments giant PayPal made global headlines when it announced that US users would be able to buy, sell, and hold cryptocurrency in their PayPal wallets, as well as use it to pay for purchases. Supported coins include BTC, ETH, BCH, and LTC.
This is a key development for the crypto market, since PayPal is one of the largest forces in the world of traditional electronic payments. In 2020, its processed volume reached $936 billion, while the number of users exceeded 370 million.
PayPal’s embracing cryptocurrency will do a lot to improve the image of digital assets as somehow risky and even unsafe. In fact, back in 2018 the company’s ex-CEO Bill Harris called BTC ‘useless’.
There are a few caveats, though. What PayPal users purchase isn’t actual Bitcoin but rather exposure to it, similar to financial derivatives The big difference between a ‘real’ crypto wallet and PayPal is that BTC cannot be withdrawn from PayPal to an external blockchain address.
However, one can still benefit from price volatility, buying BTC through the PayPal app when it dips and then selling it for a higher price.
The limitation on withdrawals may be temporary, though. In July 2021, it became known that PayPal is also planning to offer crypto exposure in the UK and is also looking into options to let users transfer crypto into external addresses.
Even more interestingly, PayPal CEO Dan Schulman said in a recent earnings call that the payment giant is looking into smart contracts and DeFi.
Though there are no clear plans as of yet, the idea is certainly exciting. By integrating DeFi tools like staking or lending, PayPal could allow its users not only to use money, but to earn money within the app.
Interestingly, however, there is another payment company that has beat PayPal to this goal: CoinsPaid.
CoinsPaid is one of the world’s leading crypto payment providers, meaning that it processes crypto transactions for online merchants.
When you pay with Bitcoin on an eCommerce store, online casino, or any other website, your crypto goes to the merchant’s account with a payment processor – such as CoinsPaid.
Without such gateways, crypto payments would never be able to achieve mass adoption. The reason is simple: it’s not practical for merchants to accept crypto directly from customers – and neither is it prudent for shoppers to send BTC directly to a merchant’s blockchain wallet.
Processors like CoinsPaid leverage robust security systems that detect suspicious transactions such as those originating in the darknet.
They also allow merchants to convert crypto into fiat and withdraw the revenue to a bank account: a much easier solution in terms of taxes and accounting.
CoinsPaid serves over 700 merchants across the globe and supports 100% cryptocurrencies. In 2021 alone, the company’s turnover reached 2.3 billion euro, while the total number of transactions processed since the processor’s inception reached 9 million.
These numbers may seem impressive, but they aren’t the most interesting thing about CoinsPaid. The company recently announced that it’s expanding into DeFi and launching its own token, CPD.
It’s the first time that a crypto processing business ventures into the booming market of decentralized finance, where the total locked value has already reached $80 billion.
The new DeFi ecosystem will allow the merchants served by CoinsPaid to take advantage of crypto staking, liquidity mining, lending, and borrowing – something that they would have trouble doing on most DeFi platforms.
Retail users, too, will be able to earn up to 20% APY staking CPD. CoinsPaid is now preparing to launch an IDO (decentralized token sale), which will take place in two rounds on August 24 and August 31.
CoinsPaid’s example, just like PayPal’s, shows the possible direction for the crypto payment industry: instead of staying apart from the DeFi market, which is often perceived as ‘wild’, payment companies can embrace it.
Perhaps the future is not a battle of CeFi against DeFi, but rather a synthesis: solutions that bring together the security of centralized finance and the high yields of DeFi.
Unlike CoinsPaid, FIS is a traditional fiat payments processor, and the world’s largest at that. This Florida-based company is part of the Fortune 500 list and employs over 50,000 people across the globe (all of whom work remotely, by the way).
FIS’s purchase of Worldpay for $35 billion made it the no.1 company in its industry: it processes around 75 billion transactions each year for a total amount of $9 trillion.
Thanks to this agreement, banks working with FIS will be able to offer their clients crypto-related services, such as buying Bitcoin.
Soon after this news went public, FIS made another announcement: it will work with the crypto exchange CEX.io to offer crypto debit cards. CEX.io will offer these cards to its clients in the UK and some European countries, while FIS will process the transactions made using the cards.
Just like with PayPal, the arrival of FIS on the crypto scene can mean a great boost to the credibility of this young industry.
After a decade of being viewed as an experimental asset for geeks at best and a gold mine for speculators and conmen at worst, cryptocurrency is finally becoming a respectable asset class. Perhaps the idea of crypto as an everyday means of payment will also soon become reality.