The CFO of PayPal has stated that merchants using the service are not in favour of accepting cryptocurrency payments. John Rainey, the chief financial officer of the online payments company, said that the volatility of digital currencies makes them unsuitable for use as a currency at present.
Bitcoin Proving Too Volatile to Use as a Currency
Speaking in an exclusive interview for CNBC’s ‘Mad Money’ segment yesterday, John Rainey stated that merchants using PayPal were not fans of accepting payments for goods and services in cryptocurrency. The CFO of the online payments company blamed the ever-swinging prices of digital currencies such as Bitcoin and Ether for the lack of acceptance amongst sellers on the platform. Rainey told presenter Jim Cramer:
“If you’re a merchant and you have, let’s say, a 10 percent margin on a product that you sell and you accept Bitcoin, for example, and the very next day it moves 15 percent, you’re now underwater on that transaction.”
PayPal started accepting Bitcoin payments back in 2014. The company bought Braintree five years ago who became PayPal’s go-to developer platform. Merchants on the platform then had the option to opt-in if they wanted to receive funds in cryptocurrency for their goods and services. Partnerships with BitPay, GoCoin, and Coinbase facilitated the option.
However, the PayPal CFO claimed that the option had not proven popular as a means of payment. He said that those that were accepting it quickly converted their funds to a more stable currency to protect against the volatility:
“So what happens, or what was happening, is they were immediately moving that to a more stable currency.”
Whilst Rainey admitted that there were consumers who supported cryptocurrency payments, he ultimately surmised that this didn’t amount to much without the backing of the platform’s merchants:
“You could have something that appeals to consumers, but if merchants don’t accept it, it’s of little value… Right now, we don’t see a lot of interest from our merchants. But if it’s something that stabilizes in the future and is a better currency, then we’ll certainly support that.”
We last reported on PayPal back in March of this year. According to an application with the U.S. Patent and Trademark Office (USPTO), the company were working on a way to speed up processing times for crypto payments using what they call an ‘Expedited Virtual Currency Transaction System.’
Meanwhile, Jack Dorsey, the CEO of fellow payments platform Square, spoke of his desire to see Bitcoin become the ‘native currency’ of the Internet. Dorsey, who is a long time crypto advocate, appeared at Consensus 2018 this week. There, he spoke about Bitcoin’s future and how the use of crypto as a true currency would allow the Square app to be listed at every application store on the planet instead of the five they were currently limited to.