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After nine months of deliberation as to whether online retail giant Ebay and its sister company PayPal would go the whole hog and actually begin supporting Bitcoin.
The speculation, which has lingered since January this year, has come to an end as PayPal begins to offer limited support for Bitcoin, paving the way for one of the largest market places and its associated payment processing provider to become a prolific component for international virtual currency users.
In order to bring this to fruition, PayPal has entered into strategic partnerships with three large Bitcoin payment processing companies which was announced yesterday afternoon by the large conglomerate.
Merchants in North America which provide many items which can be purchased online and downloaded, such as music, games, and cellular phone ringtones may now accept bitcoin through PayPal Payments Hub, the company’s service for digital goods retailers. The company says it is “giving our digital goods merchants an easy, one-stop way to test the waters with this new form of payment.”
The three payment processing companies which PayPal has partnered with are Coinbase, which has long since become an accepted mainstream entity, having raised funding from Silicon Valley investors including Andreessen Horowitz. The second provider is BitPay, which is backed by Virgin mogul Richard Branson along with other investors, and GoCoin, the smallest of the three, which is backed by a series of angel investors and bitcoin companies.
The likelihood of PayPal taking this step became more positive last month, when PayPal subsidiary Braintree began considering the acceptance of Bitcoin, which at the time was viewed to be a potential boon to the online merchant services business, creating a potentially vast international marketplace with no cross-border transaction costs.
At the time of Braintree considering such a move, PayPal officials had been engaged in several meetings over the course of a number of weeks with several companies that facilitate bitcoin transactions, one of which was Coinbase. The timing of when Braintree would accept Bitcoin is dependent in part on such a deal, which has now gone ahead.
Bitcoin advocates working toward making the currency mainstream have long called for PayPal to embrace the virtual currency which, in contrast to last year’s series of events which cast doubt on its future, has found all-encompassing acceptance this year across many business sectors, thus heading toward the mainstream.
PayPal is well recognized as a giant among online payment firms, therefore its acceptance could lead to a giant leap forward for Bitcoin. The interest in virtual currency among PayPal senior management dates back to May 2013 when PayPal president David Marcus called the currency “truly fascinating” in an interview and seemingly endorsed it over near-field communication, the technology Apple is using to enable mobile payments in its new phones.
Whilst clearly an advocate of the currency, PayPal has a corporate responsibility to retain a degree of conservatism, stating that “Today’s news does not mean that PayPal has added Bitcoin as a currency in our digital wallet or that Bitcoin payments will be processed on our secure payments platform. PayPal has always embraced innovation, but always in ways that make payments safer and more reliable for our customers. Our approach to Bitcoin is no different. That’s why we’re proceeding gradually, supporting Bitcoin in some ways today and holding off on other ways until we see how things develop.”
For the full announcement by PayPal, click here.