The first quarterly earnings were disclosed after the US payment company PayPal launched a service to buy and sell cryptocurrencies. PayPal announced that in the fourth quarter of 2020, the total number of accounts increased by 16 million and the total payment amount reached 27 billion dollars.
PayPal expanded its service target in November 2020 so that 350 million U.S. users can buy and sell Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH).
PayPal said in a recently published investor report that the number of users who purchased cryptocurrency has doubled the number of accesses before cryptocurrency purchases.
Meanwhile, PayPal’s payment service sales rose 12% QoQ to $5.7 billion. PayPal explained that sales generated from cryptocurrency purchases, sales and holding services are included in total sales, but cryptocurrency-related payments are not included in the total payment amount.
It is also noteworthy that PayPal’s technology spending is close to $732 million, up 30% from the previous year.
In the fourth quarter earnings report, PayPal CEO Dan Schulman emphasized that “the cryptocurrency transaction volume exceeded expectations,” and emphasized, “We will use this early performance as a starting point to allow customers to use cryptocurrency to finance funds.” He also said he hopes to launch international services in the coming months.
Schulman also said that PayPal is also investing in the cryptocurrency business sector, saying that PayPal is in consultation with regulatory and monetary authorities to build a’next-generation financial system’.
As digital asset prices have risen a lot recently, when asked by an analyst about future acquisition plans, Chief Financial Officer John Rainey replied that “a strategy that will be pursued over the years.” At the same time, he mentioned that the conditions for taking over are well established.
“PayPal is in a special position in the financial ecosystem with its exceptional growth rate and surplus management. This allows us to explore new opportunities to complement what we are doing.”
James Friedman, senior fintech research analyst at Susquehanna Financial Group, assessed that PayPal’s greatest value was not a payment service, but a user network built on PayPal.
He pointed out that not all cryptocurrency trading services have high returns, taking another payment company, Square, for example.
“Square also provides cryptocurrency services and forms a market, but there is no significant value creation. The transaction service itself is interesting, but it’s not at a level that we can use as a payment tool. On the other hand, PayPal boasts a huge number of payment users.”
Susquehana, a market maker investing in PayPal Securities, is still having difficulty using Bitcoin as a daily payment tool, so it is analyzing the situation through a survey.
70% of SMEs using PayPal are willing to use Bitcoin as a payment method
In December of last year, Susquehanna conducted a survey of 120 small and medium-sized businesses and asked if they were willing to introduce bitcoin payments.
More than 70% of respondents said that if PayPal or Square added a Bitcoin payment function, they would accept Bitcoin as a payment method, but about half said it would have no effect on their current business. In addition, more than half of the respondents cited’the risk of fraud’ as the biggest reason for not accepting Bitcoin as a payment method for goods or services. Relatively few respondents chose price volatility or tax issues.
However, few individuals are willing to use coins as a payment method.
In a survey of more than 100 American adults, Susquehana also surveyed attitudes and usage trends toward cryptocurrency, and their willingness to choose a payment tool. Nearly half of the respondents said they did not intend to use cryptocurrency as a payment method when purchasing goods or services, and only 5.5% of respondents said that they would pay with cryptocurrency more than 10 times a year.
· Translated by NewsPeppermint.
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