EBay’s PayPal service will start accepting bitcoins, opening the world’s second-biggest internet payment network to virtual currency transactions.
“We’re announcing PayPal’s first foray into bitcoin,” Bill Ready, the chief of eBay’s Braintree unit, said at Techcrunch’s Disrupt SF conference on Monday.
“Over the coming months we’ll allow our merchants to accept bitcoin. On the consumer side it will be a sleek experience.”
As the world’s biggest online marketplace and operator of the global payments service, eBay is the most significant business to embrace bitcoin to date. The move could potentially enable PayPal’s 152 million registered accounts to transact using the virtual currency, spurring wider use and acceptance, according to Gil Luria, an analyst at US-based Wedbush Securities.
“PayPal integrating bitcoin into Braintree is a very substantial development,” Luria said. “Not only will it make it possible for some of the fastest-growing apps to integrate bitcoin seamlessly, it opens the door for PayPal to integrate bitcoin into its main wallet functionality. If that happens millions of retailers will de facto be accepting bitcoin overnight.”
Braintree provides payment capabilities on websites and in mobile apps such as mobile car-booking service Uber and Airbnb, the short-term home rental service for travellers.
EBay acquired Braintree for $US800 million in cash last year to expand its mobile-transactions business. PayPal and Braintree will work with bitcoin payment-service provider Coinbase to enable payments in the virtual currency, Ready said.
Ready said that tens of thousands of PayPal merchants using Braintree will be able to accept bitcoins if they choose to do so.
“We’re at the right time for this, and to see how to propel it forward,” Ready said. He expects to announce which merchants will accept bitcoin in the coming months.
EBay would join other companies in accepting bitcoin, a digital currency that started to enter the mainstream in 2013. Dell began accepting bitcoins for for good such as computers in July.
Dish Networks, Overstock.com and Expedia also accept the virtual currency. Numerous online and offline businesses worldwide now accept bitcoins be it for beer, coffee or facials.
In total, about 63,000 businesses handle bitcoins, and users have set up more than 5 million digital wallets to keep their holdings at the end of June, according to CoinDesk, a website tracking the digital money’s use.
Bitcoins emerged from a 2008 paper written by a programmer or group of programmers under the name Satoshi Nakamoto, becoming the most popular virtual currency. It relies on a public ledger and cryptography to record transactions and protect ownership.
A Bloomberg Global Poll of financial professionals in July indicated that there’s still skepticism of the virtual currency even as technology entrepreneurs, venture capitalists and hedge funds plow money and effort into building it into a global payment system.
Bitcoin prices have swung between more than $US900 to as low as $US341 this year as enthusiasts try to address the digital currency’s weaknesses, persuade consumers to embrace it and overcome governments’ concerns that it could be misused by criminals.
Fifty-five per cent of those surveyed said the virtual currency trades at unsustainable, bubble-like prices, according to the quarterly poll of 562 investors, analysts and traders who are Bloomberg subscribers. Another 14 per cent said it’s on the verge of a bubble.