SHOPPERS will soon be able to pay with bitcoin when buying online through Paypal.
The payment giant is adding the option for customers to pay using the cryptocurrency, just like they can chose a credit or debit card at checkouts when shopping online.
Paypal said the crypto payment option will be available for making purchases at millions of online businesses worldwide over the coming months.
Paypal first announced last year that it would let customers buy, sell and hold bitcoin, as well as other popular virtual coins – Litecoin, Ethereum and Bitcoin Cash.
Now anyone holding these cryptocurrencies in their Paypal wallet will be able to make purchases with them too.
Paypal will convert it into the local currency of the business – so dollars in the US where the feature will be available first.
What is Bitcoin?
BITCOIN got you baffled? Here’s what you need to know:
- Bitcoin is a virtual currency
- It's traded between people without the help of a bank
- Every transaction is recorded in a public ledger, or "blockchain"
- Bitcoin is created by mining
- Mining involves solving difficult maths problems using computer processors
- Bitcoin can be traded anonymously, which can make it a popular way of funding illegal activities
- The value of Bitcoin fluctuates wildly
- Bitcoin is one of many different cryptocurrencies, but by far the most popular
Business will then receive the payment from Paypal in dollars.
Customers will see the conversion rates at the checkout and there are no exchange fees or other charges.
We've asked if shoppers in the UK will be able to pay with cryptocurrencies through Paypal and will update this story when we hear back.
PayPal says its new "Checkout with Crypto" feature will make it easier for business to accept bitcoin because it takes care of the conversion and its checkout technology is already used by millions of businesses.
Acceptance of cryptocurrencies as payment is not widespread and up to individual businesses.
There are around 20,000 locations across the world where you can use the virtual currency in real-life shops and pubs as well as online, according to cryptocurrency website Coinmap.
For instance, the UK shop Lush accepts bitcoin online using BitPay, a US payments processer that is similar to PayPal.
Tesla announced last month that customers could use bitcoin to buy electric cars.
The high profile backing of the cryptocurrency by the company sent its value surging.
5 risks of crypto investments
THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
Tesla entrepreneur Elon Musk is a bitcoin backer along with several other high profile supporters like Twitter and Square founder Jack Dorsey and rapper Jay-Z.
Paypal's initial announcement that it would support cryptocurrencies last year also sent the price of bitcoin surging.
It is one of the most high profile companies to support the newly created digital currencies.
Mastercard revealed in February that it will allow crypto payments later this year and Visa said yesterday it is working on similar plans.
But buying cryptocurrencies can be very risky.
The price is volatile and can rise and fall sharply, meaning you can be left with less money than you put in.
People considering investing in Bitcoin or shares and stocks have been warned over "risky" tips being shared on TikTok.
Bill Gates recently warned over the dangers of investing in the cryptocurrency and that it's only suitable for the super-rich because of the huge financial risk.
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