I see people posting about the latest news regarding PayPal, because as of today, you can use crypto in your PayPal digital wallet to pay for goods. The option is available only in the US, possibly it'll be also implemented for other countries in the future, but right now that's not my point. Let's look at the facts and see why I say don't trust this online payment platform.
Image by Gerd Altmann from Pixabay
Use case
You can jump for joy but you need to look at the big picture and acknowledge that currently with PayPal you can only buy crypto, pay with crypto throughout PayPal but you cannot withdraw crypto. In other words once the crypto is in your wallet, your only choice is to spend it.
Crypto is widely appreciated due to its volatility. HODLing pays off in some cases and if you know what you're doing, you can make a nice profit in a short period of time. But in order to do that, you need to have your crypto ready to be able to act, when it's time.
Safety
As PayPal it is an online platform, safety is the most important. Up until this very day login to PayPal is done the old fashion day, like in the 80's. You need an email address and a password set by you.
I need to specify that I am not based in the US, so don't have access to this new feature. I may be wrong, although I don't think so. Up until this very day I use the above mentioned verification process to log in to my wallet. We live in a digital era, there are several ways to verify a users identity and make the login safe. This is not one of them.
Now as I said, I don't have the crypto payment available in my country, but even so, funds have to be safe.
Yet with PayPal you're everything but safe. Not only can your account be hacked very easily, PayPal can cancel your account anytime. Not your key, not your crypto! We have a couple of users on Hive, who have been through hell when PayPal cancelled their account, one of them even lost his business due to it and had to start over.
Now you may think I'm so bitter because I had a negative experience with them but the truth is far from it. As far as PayPal is concerned, I'm the luckiest person in the world. I felt safe for more than a decade due to PayPal. Whatever products I have bought during the years and haven't got them, I got a refund every time.
Once my PayPal account got hacked, all me funds ($2 :D), got stolen and PayPal gave my money back an helped me go through the process of changing my password. So I only have good words to say about them.
However, that doesn't change the fact that the deal they are offering is not good.
PayPal vs Binance
PayPal is offering the possibility to pay merchants with crypto, but in fact is acting as an exchange as sellers are getting fiat, not crypto. They say there's no fee but trust me, they are not working for free, the conversion rate must be favorable to them and not you or sellers. PayPal fees are a bit steep anyway, so I'm expecting the rates to be steep too.
Binance has launched the VISA Card option in Europe, which gives you the possibility to pay for anything, anywhere. I don't have it yet, but I suspect you convert your crypto to BNB and pay whenever you have to. BNB can be converted then in any crypto you want, unlike with PayPal, where you can only cash out fiat.
When you use your Binance Visa Card, you don’t have to worry about fees from our side. We charge zero subscription or maintenance fees, and transactions made in Euros are free of transaction charges (third-party fees may apply*). To make the deal even sweeter, for every purchase that you make with the Binance Visa Card, we are offering up to 8% cashback, the highest rate available in the market today! A virtual card will be available to you for immediate use upon approval of your application. source
You can BNB when you think the price is right for you and you can watch your BNB portfolio getting bigger in value if the price rises.
When it comes to security, Binance is slightly better than PayPal, as the sign in process requires a mobile phone verification through a code send by Binace, but it's not your key, not your crypto as you own an account but not the key. I'm HODLing most of my crypto assets on a cold wallet and only a small fraction on exchanges.
source
Conclusion
PayPal is a middleman that wants to take advantage of the situation, building a bridge between crypto holders and merchants. The whole idea of using crypto and defi is to get rid of the middleman, yet, here that's not the case.
PayPal may look like a pioneer in this regard, but I don't see a bright future for this type of crypto payment. Sooner or later merchants are going to be able to accept crypto, without conversion and then this type of service will be useless.
Till then I see room for competition. PayPal operates in the US for now, while Binance in Europe through VISA and I suppose both will expand their services worldwide very soon. It's possible we're going to see other players on the market with similar services.
However, this is not our goal. The goal is to be able to pay with crypto without being converted by a third party. There's a long way till then but it's going to happen eventually. Tesla is accepting BTC and not converting it. This is a huge step forward and I hope others will follow very soon. There has been a lot of speculations who's next. Some suspect it's Apple. I guess we'll have to wait and see.
I may be wrong, but this is how I see the situation. I'm not going to use PayPal for crypto.