Fintech giant app Paypal has partnered with Paxos to launch a new crypto service. This new venture will serve more than 300 million PayPal users.
PayPal Holdings Inc (NASDAQ: PYPL) has partnered with Paxos Crypto Brokerage to launch its crypto service. The move would be PayPal’s first proper foray into the cryptocurrency sector, which it has avoided for quite a while now.
Paxos Crypto Brokerage is an API-based brokerage service that launched last week. Paxos created the new service to help fintech firms like PayPal, with access to crypto services. These firms can now offer crypto to customers buy integrating trading into their own applications. In addition, Paxos will also take charge of liquidity, technological, and regulatory matters.
PayPal to Expand into Crypto
Fintech firms now see cryptocurrency as a promising way to add to the growth of their companies. Apart from Square’s Cash App and unicorn stock brokerage Robinhood, the new venture will make PayPal one of the crypto sector’s major players. In addition to these firms, other fintech firms that provide crypto services include SoFi and eToro.
With over 300 million PayPal users, the new crypto service will add to the growth of the fintech firm. Speaking on the features of Paxos Crypto Brokerage, Charles Cascarilla, CEO and Co-Founder of Paxos, said:
“Paxos Crypto Brokerage makes it easy for businesses to add cryptocurrency buying, selling, holding and sending capabilities to their applications… This is a low-cost, safe and easy way for companies of all sizes to enable crypto for their customers.”
In the 15th July announcement, the CEO also declared his excitement about Revolut US as the “first customer to integrate our solution into its product.”
Before the announcement, there were rumors about PayPal getting involved in the crypto sector. In 2019, the firm was a founding member of Libra Association, the governing body for Facebook’s forthcoming Libra cryptocurrency. However, the association received heavy backlash from the U.S. Congress, causing the departure of PayPal and other founding members. Other prominent companies that departed from the Libra Association include Visa Inc (NYSE: V), eBay Inc (NASDAQ: EBAY), and Mastercard Inc (NYSE: MA).
PayPal Joins Other Fintechs in the Sector
According to a research report by Zabo, 18% of U.S. millennials already own crypto while 42% have plans to buy crypto in the next five years. Also, the report revealed how leading fintechs like Robinhood and Cash App used crypto to grow their businesses by rolling out support.
In the first quarter of 2018, Robinhood had over two million downloads after releasing its Robinhood Crypto. In the first quarter of 2020, Square’s Cash App gained $306 million in Bitcoin sales. The gain was a 367% increase over the previous year’s addition in the same quarter. The Zabo report says: “These crypto products accelerated growth and user acquisition which was rewarded by investors.” With the continuous growth of crypto in the world today, every fintech product will offer crypto services in the near future or lose their customers and revenue, the report added.