The news that PayPal, the payments giant with 325 million active user accounts worldwide, was considering direct sales of cryptoactives – along with escrow services – had the crypto community buzzing in recent days, even though reports have not been verified. On July 1, a PayPal representative told Cointelegraph, „PayPal does not comment on rumors or speculation.
Guy Hirsch, the CEO of eToro in the United States, told Cointelegraph: „The importance of a global company like PayPal and Venmo getting into the crypto industry is profound. It will change the nature of cross-border transactions, which are now expensive and slow. In addition, Hirsch added, „We will see more companies following in the footsteps of Facebook, and now PayPal, to take advantage of crypto currencies for cross-border payments, settlements and other use cases needed to optimize for a global economy.
Sidharth Sogani, the founder and CEO of the research firm Crebaco, told Cointelegraph: „The future of payments is in cryptomonies and P2P transaction agreements. Like it or not, it’s here to stay,“ adding, „PayPal has been the leader in simplifying online payments, and that’s why it recognizes the simplicity and capability of cryptomonies.
So does this mean that large traditional companies are now ready to adopt crypto payments? Perhaps not, at least according to two recent research reports.
In a May 2020 report that was shared with Cointelegraph, Gartner, a research and consulting firm, warned chief information officers of large companies to be „very careful about claims that Bitcoin and other cryptomontages could be successful as a medium of exchange,“ it added:
„Despite the promise of bitcoin and other cryptomonies, none of the largest online or traditional retailers accept them on a large scale. While Bitcoin is used as a store of value, it has not become a medium for day-to-day commercial exchanges.
The study questioned whether Blockchain-based payments would actually reduce fees as claimed. In addition, „there is a lack of clarity in accounting and tax treatments, and most merchants are not able to manage the risks of exchanging crypto currencies“.
A recent Credit Suisse report, meanwhile, predicted that „cryptomonies will face the challenge of having a significant impact on the existing consumer payment (C2B) ecosystem in the short to medium term“. The problems cited were fiscal issues, regulatory uncertainty and „the lack of chargeback processes and disputes“.
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Others agree that the challenges remain. Nick Saponaro, co-founder and chief information officer of The Divi Project – a solution with masternodes – told Cointelegraph, „We need more solutions that facilitate B2B payments and billing before we see corporations make a mass adoption. In the United States, the current tax treatment of crypto currencies makes them unattractive as a medium of trade. „You don’t have to pay capital gains for the fiat accepted at your point of sale, and you shouldn’t have to do it with Bitcoin. For now, however, you do,“ he said.
However, these obstacles can be overcome, according to Hirsch: „Although there are local problems in all jurisdictions with taxes, regulations and risk management, the benefits outweigh the drawbacks.