PayPal has announced that they are partnering with BitPay, Coinbase, and GoCoin to allow merchants to accept Bitcoin, marking a clear change in attitude from their earlier stance. What's more, this comes just a few weeks after an earlier announcement that Braintree users would be able to accept Bitcoin.
So why is PayPal willing to work with Bitcoin now and not
last year, or even two or three years ago? I think the inability to roll back
purchases made via Bitcoin posed a serious risk, especially for fraud. Just
imagine complaints like, "Hey, I bought this $2000 product with Bitcoin
and the merchant never shipped it!" PayPal would have been forced to
either refund the money from its own pockets, or perhaps worse the user would
end up being scammed. With companies like Coinbase and BitPay now providing services
that help mitigate some of these risks, plus successful adoptions of Bitcoin by
many other resellers, it looks like PayPal is finally ready to hop on the
Bitcoin bandwagon. All I can say is that it's about time!
The support for Bitcoin will come via integration into the
PayPal Payments Hub, and unfortunately it will only be supported for merchants
in North America for the time being. There are other qualifications to using
Bitcoin with PayPal as well, as the blog notes: "To be clear, today’s news
does not mean that PayPal has added Bitcoin as a currency in our digital wallet
or that Bitcoin payments will be processed on our secure payments platform. PayPal
has always embraced innovation, but always in ways that make payments safer and
more reliable for our customers. Our approach to Bitcoin is no different.
That’s why we’re proceeding gradually, supporting Bitcoin in some ways today
and holding off on other ways until we see how things develop."
Of note is that this comes at a time when the mining phase
of Bitcoins and other virtual currencies has largely moved beyond GPUs and onto
dedicated SHA256 and Scrypt ASICs. That's good news for gamers and graphics
gurus, though I suspect the GPU vendors may not sell as many new GPUs – and certainly
not at such inflated prices – as they did last year. Then again, I really, really want to see what a GeForce
GTX 980 (or GeForce
GTX 970) can do with mining – not that I'm willing to spend $549 to start
mining with one, but given the improvements in efficiency it could actually do
okay at mining Cryptonight, X11, X13, etc. Of course I suspect the GPU vendors
will also have fewer RMAs over the coming year – I know between myself and a
friend, we've had at least two R9 290X GPUs and four HD 7950 cards go out due
to the strains of 24/7 cryptocurrency mining (and overclocking certainly didn't
Wrapping things up, PayPal also notes that PayPal has worked
with merchants selling cryptocurrency mining hardware but refuses to support pre-orders,
which is a stance I wholly support having now been more or less burned by Alpha
Technologies. And while the announcement today is more of a baby step as
opposed to wholesale acceptance of Bitcoin, the closing comments suggest that
this is merely the tip of the iceberg: "PayPal is excited about all the
innovations taking place in payments these days. More choices in how people
create value, share it, buy, sell and trade it – that’s exactly what PayPal is
all about. And we believe Bitcoin offers unique opportunities as more people and
businesses experiment with it. We are excited to work with businesses and
business models that allow us to offer new experiences and the trusted service
our customers expect. We hope to do more with Bitcoin as its ecosystem
continues to evolve."
I've now successfully used Bitcoin to purchase quite a few
goods, from graphics
cards on Newegg.com to the games in
the latest Humble Bundle, and more and more places are beginning to get
onboard. For example TigerDirect and Overstock now accept Bitcoin as a viable
method of payment, and you can use services like Gyft
or eGifter to purchase a gift card with
Bitcoins that can be used at numerous other locations (including Amazon.com). They might be a bit
late to the part, but it looks like PayPal has decided to join the club.
While there are still naysayers when it comes to Bitcoins
and cryptocurrencies in general, this is great news for Bitcoin proponents.
Integration with PayPal literally opens the doors for thousands of small shops
to easily begin accepting Bitcoin. It's one small step for PayPal, one giant
leap for Bitcoin.