PayPal said that it will be informing all of its US customers via email and push notifications. Citing high customer demand, PayPal has increased the weekly crypto purchase limit from $10,000 to $20,000.
On Thursday, November 12, PayPal Holdings Inc (NASDAQ: PYPL) stated that it’s dropping the waitlist to buy, hold, and sell digital currencies for all eligible customers in the United States. The decision comes in just over 20 days after PaPayl announced its entry in the crypto market last month on October 21. Thus, the US customers of PayPal can directly use the crypto service and trade cryptocurrencies with their PayPal accounts.
We are pleased to announce that starting today, all of our eligible US customers can now buy, hold and sell #Cryptocurrency directly from their PayPal accounts. We’ve also increased our weekly purchase limit to $20K. Learn more: https://t.co/5yrpNOuA6y pic.twitter.com/2nZHm9qCNI
— PayPal (@PayPal) November 12, 2020
The payments giant also noted that they will inform and alert its customers through a push notification and an email. Until this announcement, this feature was partially available to a handful of US customers. The company has been also onboarding new customers via a waitlist.
The update allows new customers to directly avail these services without having to join the waitlist. Besides, citing a huge customer demand, PayPal also increases its weekly crypto purchase limit from $10,000 previously to $20,000. This is for the second time that PayPal has increased its limit in consecutive weeks. Well, this clearly goes to indicate the demand for crypto trading services in the market.
During the earnings call last week on November 2, PayPal CEO Dan Schulman said that the crypto services market remains largely underpenetrated. Only 10% of PayPal customers have access to the crypto trading service he said. PayPal has launched its crypto trading service in partnership with Paxos. Initially, PayPal will support four major cryptocurrencies namely Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
PayPal Fee and Bringing Crypto Service to Venmo
PayPal has a well-defined fee structure with slabs at each level of the transaction amount. It will charge a fee of $0.5 USD cents on transactions of up to $24.99; a 2.3% fee on transactions between $25 and $100; a 2% fee for transactions between $100.01 and $200; 1.8% on $200.01 to $1,000; and 1.5% for transactions over $1,000.01.
Well, PayPal needs to look into this as this fee structure is much more than other crypto trading services are offering. Crypto exchange giants like Binance charge only 0.1% on Bitcoin trades for base users. Besides, it also offers further discounts for regular traders.
Other US trading platforms like Coinbase charge a maximum of 1.49%. Also, crypto exchange Kraken charges between 0.16% and 0.26% with additional discounts on higher trading volumes.
PayPal said that it will bring crypto trading services to its international customers and its wholly-owned subsidiary Venmo during the first half of 2021. PayPal’s Venmo will be competing with Jack Dorsey-backed Square Inc at least for its merchant payments.
As PayPal’s crypto trading service goes live, it remains limited only to buy, holding, and selling. For the time being, users cannot send crypto across PayPal accounts nor can they withdraw their crypto to an external wallet. Thus, users need to trust PayPal for storing their crypto assets. PayPal is reportedly in talks for the acquisition of crypto custodian service BitGo.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.