PayPal had a historic year 2020, thanks to the integration of crypto in its services. According to the Q4 2020 earning report released by the financial giant on 3 February, customers became twice as active when they bought cryptocurrency than when they only used fiat. The company’s 4th quarter revenue also tripled to $1.57 billion compared to that of the previous year according to the report.
PayaPal added support for cryptocurrencies in October 2020, allowing its 286 million active users to access top cryptocurrencies including Bitcoin, Bitcoin Cash, Ethereum and Litecoin. The growth in the company’s revenue may be linked to this integration as more active users means more revenue which not be unconnected with the active cryptocurrency market towards the end of the year.
Cryptocurrency Driving Growth
Before now, PayPal was as opposed to cryptocurrencies as any of the other critics. However as the industry became more attractive with institutional investors rushing to buy assets such as Bitcoin, the company decided to embrace digital assets and from the report, cryptocurrencies have helped to bring significant growth to its revenue for Q4 and 2020 as a whole.
This is not surprising because as at December 2020, 25% of PayPal’s customers were reportedly trading cryptocurrencies already. This may also be the reason why new net active accounts increased by 95% year on year. As 2020 was a year famous for Bitcoin’s unusual bull market which was followed by Ethereum, more users may have signed up primarily to access cryptocurrencies on PayPal. While this is good for PayPal, it is also very good for cryptocurrency adoption as more customers become active users of crypto.
Crypto to be Used for Commerce in 2021
No doubt, cryptocurrency integration has added to PayPal’s already huge popularity in 2021. On this note, the company says it will be exploring the use of the digital assets for commerce in 2021. The company currently has about 29 million merchants globally, all of which will be able to accept cryptocurrencies as payments for their goods and services.
The process will require no extra integration or fees from the merchants as all transactions will be settled using fiat currencies while cryptocurrencies will only serve as funding sources. PayPal also plans to help in shaping the role of cryptocurrencies in consumer payments will millions of customers being able to use their favorite crypto assets as sources of funds for settling transactions.
This is beneficial in helping to bring cryptocurrencies to mainstream adoption as the user base continues to widen with the help of PayPal. At the time when the company announced it was integrating crypto, the crypto community expressed optimism that cryptocurrencies are finally gaining the kind of attention they deserved. With PayPal’s plans for crypto in 2021, it seems like there is more in store for the industry and also more for the company as the industry continues to grow at unprecedented rates.
