PayPal gave the entire Bitcoin market a boost in March when it launched a new “checkout with crypto” option that lets customers pay merchants in cryptocurrency. Now the payment giant is poised to expand the reach of Bitcoin still further with a new crypto feature inside its popular peer-to-peer app Venmo.
On Tuesday, PayPal said it has begun rolling out a crypto button for its 77 million Venmo users. The button will let users instantly buy as little as $1 worth of Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), or Bitcoin Cash (BCH), and send it to friends on the app.
“Customers will have the ability to buy and sell cryptocurrency using funds from their balance with Venmo, or a linked bank account or debit card. All transactions are managed directly in the Venmo app,” said the company in a statement announcing the news.
The rollout of the crypto feature, which users can access by clicking on the menu in the upper right of the Venmo app, will also include a set of educational materials that the company says will “demystify” various aspects of Bitcoin and cryptocurrency. (We at Decrypt can’t let this pass without noting that “demystifying Bitcoin, Ethereum, and the decentralized web” is our slogan we use on all our social accounts—perhaps PayPal is borrowing from our dictionary!)
The Venmo announcement is significant, not only because of the platform’s size and rapid growth. The new crypto feature is also likely to have a broader impact because Venmo encourages users to share their activity in a social stream visible to others—in practice, this means Venmo users will soon see messages like “Alice sent Youssef $50 of Bitcoin,” which could in turn serve as free publicity for crypto.
Previous crypto-related PayPal announcements have led to a surge in the price of Bitcoin, though it’s unclear for now if the Venmo news will prove to be a similar market-moving event, especially as a growing number of platforms move to integrate crypto offerings.
The Venmo announcement did not include the cost of buying and using Bitcoin, but a spokesperson said the fees would be the same as for PayPal. Those fees begin at a flat 50 cents for transactions under $25, then span a range that begins at 2.3% for transactions under $100 and drops to 1.5% for those over $1,000.
In order to facilitate crypto transactions, Venmo will rely on Paxos, a New York company that specializes in secure blockchain transactions for a variety of digital assets, and which also provides the back-end for PayPal’s crypto offerings.
Bitcoin as part of PayPal’s ‘Super App’ ambitions
Since adding Bitcoin to its platform last year, PayPal CEO Dan Schulman has rapidly embraced the broader possibilities of crypto technology. In a recent interview with Decrypt, Schulman explained how he views crypto as part of the company’s larger strategy to lower payment costs, and create a “super app” experience that aspires to see customers deploy PayPal’s wallet for everything from shopping to financial services to identification.
Meanwhile, the company has also been working to have consumers treat Venmo as more than a payment app for peer-to-peer transactions. This effort includes encouraging merchants to accept Venmo payments, and letting customers receive direct deposits in their Venmo accounts. The addition of crypto services may in time further the company’s goal of having consumers view its digital wallets as all-in-one services. On a recent earnings call, Schulman singled out crypto and Venmo as two of PayPal’s star business units.
Schulman has also stated that he does not anticipate that PayPal will follow the likes of Tesla and Square by adding Bitcoin its balance sheet. Instead, he has indicated that he prefers to use the company’s cash for acquisitions—including in the crypto sphere. One such recent acquisition was for crypto security firm Curv, which PayPal bought for nearly $200 million last month.
Schulman has also disclosed that the company’s crypto unit has been experimenting with a variety of blockchains, including Ethereum, as a means to improve payment efficiencies and lower costs. The CEO has also indicated that PayPal does not intend to compete with the likes of Coinbase in the crypto exchange business, but instead strategically partner with various companies to take advantage of different crypto opportunties.