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PayPal Officially Integrates Bitcoin

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EBay Inc. EBAY +0.51% payments unit PayPal is further integrating bitcoin into its payment processing operations, allowing digital goods merchants to accept the virtual currency via its PayPal Payments Hub service.

The arrangement, established via partnerships with the three largest bitcoin-payment-processing firms, BitPay, Coinbase and GoCoin, will initially be rolled out for North American sellers of digital goods such as games, music files, eBooks and apps. It comes after a string of announcements over the past year from companies agreeing to accept bitcoin for payments, among them Overstock.com Inc., OSTK +3.67% Dell Inc., Dish Network Corp. DISH -0.74% and Expedia Inc. EXPE +0.50%

PayPal’s Braintree unit said earlier this month it would facilitate bitcoin payments for its e-commerce clients via an agreement with Coinbase. Braintree provides software for payments processing for many online and mobile companies such as Uber and Airbnb.

“I think this is a monumental moment,” Steve Beauregard, CEO of GoCoin, said. Having the implicit endorsement of PayPal is “very pivotal for the bitcoin ecosystem.” He thought working with all three of the payments processors was a very smart move, even though he noted it means merchants will be able to choose among them. That means they will be competing with each other within the PayPal system for customers. “It’s a bit of a jump ball,” he said.

Writing on a blog post on PayPal’s website, Senior Director of Corporate Strategy Scott Ellison stressed that the deals don’t mean consumers can use bitcoin as a currency choice in their PayPal digital wallets as they can dollars, euros or other traditional currencies on PayPal services around the world. Nor was there any mention of eBay allowing bitcoin payments in its emarketplace. But Mr. Ellison suggested that PayPal was looking into other ways in which it might use bitcoin in the future.

“PayPal has always embraced innovation, but always in ways that make payments safer and more reliable for our customers,” he wrote. “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.”

In his blog post, Mr. Ellison also said that all “virtual currency exchangers and administrators interested in working with PayPal in the future must secure the appropriate licenses and put anti-money-laundering procedures in place.”

The inclusion of GoCoin in the arrangement means that merchants can choose to accept litecoin and dogecoin, two other virtual currencies that the processor handles in addition to bitcoin.

— Paul Vigna contributed to this article.

Source: http://online.wsj.com/articles/paypal-payments-hub-to-permit-bitcoin-payments-for-digital-goods-1411494837

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