PayPal Mounts Crypto Offensive After New York Grants a Full License

On Tuesday, PayPal Holding, a major global payments platform, announced that the company would let its users transfer certain digital assets and cryptocurrencies to other customers, exchanges, and external wallets. PayPal announced this new service as part of the company’s effort to boost the usage of its platform.

According to the press release, this new PayPal service will be available to select US users starting today and rolled out to all eligible US customers ‘in the coming weeks. According to Senior Vice President and General Manager for PayPal’s blockchain, crypto, and digital currencies business, Fernandez da Ponte, “This is really about access and utility; we are greatly enhancing the utility of moving crypto around.”

We’re excited to announce that PayPal will begin supporting the transfer of cryptocurrencies between PayPal and other wallets and exchanges. This feature is rolling out to all eligible US customers in the coming weeks. Learn more: https://t.co/PelvFv7eRW pic.twitter.com/YkzPOV7teq

— PayPal (@PayPal) June 7, 2022

With this brand-new feature, PayPal will enable its users to move cryptocurrencies from PayPal to external crypto addresses, including exchanges and hardware wallets, and send cryptos to family and friends on PayPal with no fees or network charges to send or receive.

Mr. Jose Fernandez da Ponte continued, “We’re excited to connect PayPal’s customers to other wallets, exchanges, and applications. We will continue to roll out additional crypto features, products, and services in the months ahead. We look forward to hearing more customer and community feedback to enhance our digital currency  capabilities.” 

In late September, the New York Department of Financial Services (NYDFS) granted the company a full “BitLicense.” This BitLicense makes PayPal the first company to convert a conditional BitLicense into a full BitLicense. This BitLicense governs businesses working with virtual currencies.

BitLicense allowed PayPal to start its crypto service in 2020. PayPal allowed its users to buy, hold and sell Bitcoin, Ethereum, Bitcoin Cash, and Litecoin in 2020. However, this new service allows customers to transfer those coins to and from various crypto exchanges. 

Fernandez da Ponte also said that PayPal has also been exploring launching its native Stablecoins while establishing connections with Web3, Defi, Dapps, and NFTs. PayPal is establishing a strategy of enticing users to use its app more by adding blockchain and web3 features to its platform. 

The recent downturn in the cryptomarket won’t prevent PayPal from expanding its crypto services. “We think a substantial amount of commerce and payments will happen on digital currencies in the future, and we are playing the long game,” said Mr. Fernandez da Ponte.

PayPal’s Average Revenue

PayPal’s first-quarter revenue for 2022, between January and March, was $6.48 billion. This was a year-over-year increase of 8%, above market expectations. However, it lost 32% of operating income, dropping to $711 million. The company reported a net income of $509 million with $0.43 earnings per share, down 53%. Earnings per share decreased by 28% on an adjusted basis to $0.88.During the first three months of the year, it processed $323 billion worth of payments, which increased 15% compared to last year.

With the activation of Crypto services on the platform, PayPal reported the average revenue per active user account doubled. The company also noted that the customers open their wallets on the platform twice after they sign up for the crypto services on the platform.