PayPal has been one of the oldest payment service providers in the world who started experimenting with cryptocurrency payment options. The company started exploring the option in 2014 and after four years of experimenting with it, the company has concluded that the merchants aren’t interested in cryptocurrencies right now. PayPal’s CFO John Rainey made the statement in an interview this Wednesday.
In the interview – on CNBC Mad Money – John Rainey told Jim Cramer, the host, how the payment giant got involved into cryptocurrencies. PayPal CFO said that PayPal was one of the first companies that allowed merchants to accept payments via cryptocurrencies. John Rainey is talking about the time when Braintree was being boasted under PayPal’s platform. Braintree as a web and mobile payments platform.
Coinbase’ developers at the time developed an integration between the cryptocurrency exchange platform and PayPal Braintree’s Software Development Kit. On 8th of September 2014, PayPal announced that the company was in a partnership with Coinbase which will allow PayPal’s customers to accept payments in Bitcoin.
At that time, CRO of Coinbase cryptocurrency exchange platform Brain Armstrong told that Twitter had a lot of offers from other developers who wanted to work on adding Bitcoin as a payment option. But Twitter was keen on keeping Braintree as the only subsystem handling all these payments, Twitter representatives had said that if the developers could add the upgrade in Braintree, they would add it. On the other hand, Bill Ready – CEO of PayPal during that time – didn’t go into details and simply remarked that the company is making a move to embrace the crypto technology.
On 23rd of September, another major step was taken in the initiative as PayPal finalized deals with leading bitcoin payment service providers including GoCoin and Coinbase. The partnership enabled digital goods merchants using Braintree SDK to add Bitcoin as a payment option by a simple procedure through the PayPal Payments Hub. The service was first offered to merchants in North America only.
The service was taken live on PayPal on 22nd of January 2015. The official statement at the time said that consumers and merchants both are getting aware of Bitcoin and popular businesses including Expedia, Overstock, and Dell are already accepting bitcoin as a payment option.
All this activity was obstructed by the popular volatility of cryptocurrencies. John Rainey explained that if a merchant is earning 10% on a product and accepts bitcoin. What scares them is that the next day, the price of bitcoin could go down 15% which would turn the transaction into a loss. Of course, it could go the opposite way and bitcoin value could increase, but the risk of losing value overnight is discouraging for the merchants. This is the reason why merchants immediately move to a more stable currency and are not interested in Bitcoin for now.