PayPal (PYPL) has launched a new feature called “Pay with Crypto,” allowing U.S. merchants to accept payments from over 100 cryptocurrencies and various crypto wallets. This move aims to streamline the payment process and reduce transaction fees for businesses. The positive development comes as PayPal prepares to report its second-quarter earnings on July 29.
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Currently, analysts expect PYPL to post revenue of $8.08 billion in Q2, up from $7.86 billion in the year-ago quarter. Further, the company is expected to report earnings of $1.30 per share, compared with earnings of $1.19 in the prior-year quarter.
Following the news, PYPL stock was up about 1% early Monday morning.
How “Pay with Crypto” Works
When a customer pays with cryptocurrency, the funds will be automatically converted into fiat currency or PayPal’s PYUSD stablecoin before being deposited into the merchant’s account.
This new feature will enable merchants to receive payments in popular digital assets, such as Bitcoin (BTC-USD), Ethereum (ETH-USD), Tether (USDT-USD), Ripple (XRP-USD), Binance Coin (BNB-USD), and Solana (SOL-USD), among others.
Merchants will also be able to connect with numerous wallets, such as Coinbase (COIN), OKX, Binance, Kraken, Phantom, MetaMask, and Exodus, with more integrations planned for the future.
It must be noted that PayPal is setting its transaction rate for this service at 0.99%. The company claims this will reduce transaction costs by up to 90% in comparison to traditional international credit card processing fees.
Further, businesses opting to convert their crypto payments to PYUSD can earn about 4% interest on those balances.
Overall, the payment giant sees this new solution as a way to connect merchants to the growing cryptocurrency market, expected to be worth over $3 trillion.
Is PayPal a Buy, Sell, or Hold?
Turning to Wall Street, PYPL stock has a Moderate Buy consensus rating based on 11 Buys, 14 Holds, and two Sells assigned in the last three months. At $81.55, the average PayPal stock price target implies a 3.73% upside potential.
