U.S payments giant PayPal is launching its U.K crypto service this week. The U.K is the first market to get this after the initial U.S rollout in October last year.
PayPal’s move into crypto was met with a mixed response. On the one hand, some were surprised the firm was getting involved with crypto. Then again, others cited centralization and an inability to transfer tokens in or out as problematic.
Aware of the criticisms, May this year saw PayPal General Manager of Blockchain, Crypto, and Digital Currencies, Jose Fernandez da Ponte, announce they are working on enabling transfers to third-party wallets.
However, whether PayPal’s involvement with cryptocurrency is a good thing or not remains a topic of intense discussion.
PayPal Brings Crypto To The Masses
PayPal CEO Dan Schulman confirmed he was bringing crypto trading to the U.K market during the firm’s Q2 results discussion with analysts at the end of last month.
True to his word, Schulman’s time frame of launching the U.K service in August appears to be right on track.
Speaking about how the U.S has responded to PayPal’s foray into crypto, da Ponte said the service has been performing well. With that, he expects the U.K to be similarly responsive.
PayPal’s service will enable U.K users to buy, sell, and hold cryptocurrencies using their platform on both its app and website. But like the U.S, there are just four cryptocurrencies on offer: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
da Ponte said the advantage of their offering is in simplifying crypto for everyday people. Adding that, it makes “a really good entry point” for the uninitiated.
“The tokens and coins have been around for a while but you had to be a relatively sophisticated user to be able to access that. Having that on a platform like ours makes a really good entry point.”
What’s more, da Ponte also added that the demand for crypto is there due to changes brought by the pandemic.
“The pandemic has accelerated digital change and innovation across all aspects of our lives, including the digitisation of money and greater consumer adoption of digital financial services.”
The Community Remains Skeptical
No doubt, more ramping, user-friendliness, and perhaps more crucially, having the assurance of a dedicated customer service team will open crypto up to more people. However, as mentioned, the inability to transfer in or out presents a real sticking point.
Last year, Bitcoin advocate Andreas Antonopoulos said that buying Bitcoin on PayPal is not like buying real Bitcoin.
“f you buy your Bitcoin on PayPal you didn’t buy Bitcoin. What you bought is, exposure to the price of Bitcoin mediated by a custodian who you hope is doing good risk management practices. But, who you cannot audit for their actual existence of reserves.”
What’s more, PayPal operates an expensive tiered fee structure. Starting with a flat fee of £0.50 for buying and selling amounts between £1 and £24.99. Going as high as 2.3% when buying and selling between £25 and £100.
By contrast, trading fees on Binance range from 0.02% and 0.10%.
As da Ponte said, PayPal targets novice users looking to dip their toes in crypto. While some may turn their nose up at what’s on offer, there’s still a market for this service.
