PayPal has announced that Venmo users can now buy, hold, and sell crypto providing crypto access to 70 million users. This further strengthens PayPal’s position as a key driver of crypto access to the public as an investment. While investors will ultimately need access to the underlying value of the assets they hold, how they achieve that access depends on how broadly the crypto asset is accepted by merchants.
This suggests that the speed with which this transition takes place is likely tightly linked to the ups and downs of the underlying value of the asset and the breadth of merchant acceptance. But further complicating the outcome are the investments made by the global networks to enable crypto value to be spent at merchant locations in the local currency.
While this suggests crypto may soon have broad acceptance, it is also possible that with a large number of exchanges involved, each taking a fee, that the conversion costs may be too high:
“With crypto on Venmo, customers can view cryptocurrency trends, buy or sell crypto, and access in-app guides and videos to help answer commonly asked questions and learn more about the world of crypto. Customers using crypto on Venmo can choose from four types of cryptocurrency: Bitcoin, Ethereum, Litecoin and Bitcoin Cash. When they make transactions, customers can also choose to share their crypto journey with their friends through the Venmo feed.
“Crypto on Venmo is a new way for the Venmo community to start exploring the world of crypto, within the Venmo environment they trust and rely on as a key component of their everyday financial lives,” said Darrell Esch, SVP and GM, Venmo. “No matter where you are in your cryptocurrency journey, crypto on Venmo will help our community to learn and explore cryptocurrencies on a trusted platform and directly in the app they know and love. Our goal is to provide our customers with an easy-to-use platform that simplifies the process of buying and selling cryptocurrencies and demystifies some of the common questions and misconceptions that consumers may have.”
According to the 2020 Venmo Customer Behavior Study1, more than 30% of Venmo customers have already started purchasing crypto or equities, 20% of which started during the pandemic. With the introduction of crypto on Venmo, the broader Venmo community will now have access to an easy-to-use and intuitive crypto platform to help them take part in the cryptocurrency market. The launch of the feature furthers PayPal’s commitment to educating its customers on the potential of digital currencies as they continue to grow and drives understanding and utility of cryptocurrencies on a mass scale. ”
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
