PayPal Open Letter: Why Blockchain is the Only Solution for the Digital Payment Revolution?

The payment giant PayPal recently released a public article titled "Pay Any Way You Want," which mainly describes PayPal's mission to improve payments and the importance of blockchain and cryptocurrency in payment reform. The following is a translated excerpt of the content. For the original article, please refer to: PayPal English Original

Money, Payments, Freedom

Money is not powerful when accumulated; money is powerful when in motion. Billions of transactions take place worldwide every day, with payments being the most tangible and frequent use of money. However, payments are not just a means of exchanging value; they are a story of advancing freedom. Every transaction we make – from buying a coffee to transferring funds overseas – is an expression of our financial autonomy. Yet, the inability to pay in the way we desire limits our ability to establish, share, and utilize value on our own terms.

Now, over a decade after the emergence of blockchain technology, PayPal faces a new challenge at a crucial moment in payment history. Just as we brought payments online, we are now taking payments onto the chain.

Our commitment remains the same: to drive payment innovation and enable everyone to transact as they wish.

The Digital Payment Revolution

As vast amounts of information move online, mechanisms for tracking and managing funds also migrate – from account balances to transaction histories and broader business functions. This thriving online commerce ecosystem sets new expectations for how transactions are conducted.

Today, people seek the same immediacy and borderless payment scope as their daily online interactions.

This digital transformation highlights a newly emerging gap. While the internet provides the infrastructure for global commerce, there is a clear lack of reliable and efficient online payment systems. People seek a platform that is not only secure but also fast and intuitive. Businesses need a reliable platform to cater to their growing online customer base.

PayPal bridges the gap between the new digital financial tracks and consumer trust, and the urgent need for accessibility. We have built an ecosystem that fulfills people's desire to pay globally in a flexible and secure manner.

Today, PayPal has over 40 million active accounts, proving that it is not just about recognizing market gaps but about our unwavering commitment to making payments easier.

For decades, despite the development of the internet and the emergence of other fintech tools, our focus has remained unchanged. From early facilitation of eBay transactions to the acquisition of Venmo in 2013, our trajectory has always been defined by one question:

How do people want to pay?

We have spent decades answering this question. At its core, the answer remains quite simple: people want fast, inexpensive global payments. However, the solutions have become increasingly elusive over the past three decades.

A New Gap: PayPal, Cryptocurrency, and New Financial Paths

While the digital payment space has long strived to offer global, real-time, and seamless transactions, the reality often falls short. Until now, payment innovation has been built on the same foundational financial tracks as the rise of the internet. In reality, "real-time" settlements and "24/7" services are often convenience layers achieved through services that accept or transfer risks.

The settlement times for online payments remain lengthy, averaging 2-3 days in the United States. Markets, banks, and services operate within working hours, further extending settlement times. Employers struggle to pay an increasingly dispersed workforce. A globally mobile population finds it challenging to remit funds across borders in a cost-effective and rapid manner. Businesses feel these friction costs most acutely, while consumers still face long settlement times, believing they should be faster.

In short, people today may not necessarily be able to pay in the way they desire.

So, why cryptocurrency? The answer is practical. Cryptocurrency brings us closer to people's desires: fast, inexpensive global payments. And as we mentioned before, we are in the business of payments.

Blockchain is a new financial path – a new payment conduit. Blockchain technology disrupts the concept and operation of payments. Settlement times are almost instantaneous for customers and businesses – anytime, anywhere.

This is no small matter; blockchain technology is the only technology that offers a brand-new way of making payments. While it may seem like a trend to some, for PayPal, blockchain makes sense. If there is a payment tool that can provide round-the-clock, nearly instant, and cost-effective transactions, exploring that solution is a practical choice.

This is not about chasing a trend; it is about identifying and adopting an alternative, potentially superior financial technology for payments.

Again, PayPal recognizes the opportunity to bridge the gap between new payment conduits and "broad adoption and trust." With 400 million accounts, we can better serve our customers by offering additional options through blockchain-based payment solutions. As we did in the early days of e-commerce, PayPal is once again moving towards a single goal: letting you pay as you please.

PayPal, Payments, and PYUSD

In 2020, we enabled PayPal and Venmo users to buy, hold, and sell cryptocurrencies in their accounts. Last year, users could begin transferring the cryptocurrencies they purchased in their accounts to external wallets, including decentralized wallets.

We envision PayPal and Venmo continuing to serve as key hubs for commerce, the primary conduits for businesses and individuals to transact goods and services. By allowing the transfer of cryptocurrencies between PayPal and Venmo accounts, we connect the DeFi and CeFi worlds through a platform adept at facilitating payments.

Our macro view on blockchain and cryptocurrency is neutral – meaning, we do not take a specific stance.

We know that our customers still desire easier, faster, and cheaper payments. We understand that blockchain achieves these types of payments in a way that today's internet financial channels do not. We believe that our customers should have the choice to adopt new solutions to meet their potential needs.

However, we do have a stance on stablecoins. We believe they are essential tools for fully realizing the potential of cryptocurrencies as accessible and flexible payment instruments.

Our position in the stablecoin space is with PYUSD issued by Paxos. This is our commitment to customers. We are doing what we have been doing since 1998: providing our customers with what they want.

What our customers want is easier payments. Businesses want to pay suppliers without worrying about settlement times. Individuals want to remit funds to family members without high fees and waiting days. Our customers do not want their transactions to lose value while waiting for today's financial channels to catch up.

Blockchain technology is now the only innovation that offers a completely new payment conduit to meet customer needs. We have always strived to be pioneers in one aspect: consistently providing our customers with what they want and deserve – trust, confidence, and ease. PYUSD is just the next evolution towards that goal.

Payment as You Please

At PayPal, we have always believed that the essence of money lies in its fluidity, and fast, inexpensive, and global money flow is what our customers seek. PayPal's history is a testament to this steadfast commitment: enabling individuals and businesses to transact on their terms. We believe that cryptocurrency creates a new paradigm that helps achieve payment goals worldwide.

In other words, we find it simple: paying with cryptocurrency means paying as you please.

Read the original article in English on PayPal