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PayPal Launches 'Checkout With Crypto' to Let Users Pay in Bitcoin and Convert to Fiat for Merchants

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Screenshot: PayPal/YouTube

PayPal will allow users to pay in cryptocurrencies like bitcoin and ether at millions of merchants in the U.S. starting today, according to an announcement from the company on Tuesday.

Called “Checkout With Crypto,” the new service will let anyone holding crypto through PayPal actually pay using crypto and PayPal will convert it to fiat currency for the business that’s accepting the payment.


PayPal launched the ability to buy cryptocurrencies through the platform in October but this is the first time users will be able to buy things with it. PayPal, which included a YouTube video in its announcement, says it will not charge a transaction fee.

As PayPal explains the new system:

  • At checkout, if a customer has sufficient balance of cryptocurrency to cover an eligible purchase, crypto will automatically display as a payment method for that purchase.
  • Customers will be able select their cryptocurrency of choice – Bitcoin, Litecoin, Ethereum or Bitcoin Cash, depending on what they are holding with PayPal and the balances available in each cryptocurrency. Only one type of cryptocurrency can be used for each purchase.
  • Once the customer confirms the purchase, the cryptocurrency is converted to fiat currency by PayPal on the customer’s behalf and the transaction is completed. The customer will receive a record of both the crypto sale, as well as the purchased item.
  • PayPal charges no transaction fee to checkout with crypto – a cryptocurrency conversion spread will be built into the conversion from crypto to USD.

The news, first reported by Reuters, will likely spur plenty of headlines about cryptocurrencies as the future of buying things online, but there are still plenty of hurdles for currencies like bitcoin and ether to become mainstream. The largest problem is volatility, of course. Who wants to actually spend bitcoin if the price is expected to rise in the near term? Spending it is basically like throwing money away.

Tesla, which recently announced it will accept bitcoin for purchases of cars in the U.S., fixed the volatility problem on its end by deciding to list prices in fiat, despite the fact that it’s accepting bitcoin as payment. That’s certainly one way to do things, but it shouldn’t give much confidence that crypto will replace the U.S. dollar anytime soon.

But crypto doesn’t need to necessarily replace fiat to become a profitable player in the market. And PayPal seems to understand that as it races head-first into the world of bitcoin payments.

“As the use of digital payments and digital currencies accelerates, the introduction of Checkout with Crypto continues our focus on driving mainstream adoption of cryptocurrencies, while continuing to offer PayPal customers choice and flexibility in the ways they can pay using the PayPal wallet,” said Dan Schulman, president and CEO of PayPal, said in a statement on Tuesday.


“Enabling cryptocurrencies to make purchases at businesses around the world is the next chapter in driving the ubiquity and mass acceptance of digital currencies.”