On March 29, Visa announced that it has now accepted the cryptocurrency USD Coin as one of its means of payment. The next day, PayPal unveiled its new feature, allowing U.S. users to use their balance in cryptocurrencies (bitcoin, ethereum, and litecoin) for settlements on the platform.
There is no doubt that the initiatives contribute to the popularization and greater acceptance of cryptography as a means of payment. “The fact that Visa now accepts USD shows that stablecoins are now part of the global financial mainstream. Visa is the main payment method in the world”, evaluates Transfero’s CEO, Thiago Cesar. “This demonstrates that the company believes in blockchain technology and makes the processor integrate into a market that moves billions a year,” he adds.
Visa Pilot Project
In the case of Visa, the initiative is part of a pilot project with the Crypto.com payment and encryption platform. Thus, when a user buys a coffee, the digital currency is converted into traditional money.
The USD Coin is a stablecoin, a cryptocurrency with a price indexed to another asset (in this case, the U.S. dollar), which reduces its volatility. The company will conduct transactions through Ethereum’s blockchain and, after the announcement, the price of several cryptocurrencies, such as ether (ETH) and bitcoin (BTC), has skyrocketed.
In a statement, Jack Forestell, vice president and chief product officer at Visa, stressed that “crypto-asset fintechs want partners who understand their business and the complexities of digital currency form factors. Today’s announcement is a major milestone in our ability to meet the needs of fintechs who run their business on stablecoins or cryptocurrencies, and it’s an extension of what we do every day, facilitating secure payments in different currencies around the world”.
For Thiago, from Transfero, Visa is looking to the future and seeing alternatives to exchange fiat currencies. “The news is very positive and, without a doubt, has a great impact on the crypto market, since the average user will now be able to interact with the stablecoins through Visa’s payment network”, he highlights.
PayPal also releases cryptocurrencies as a means of payment
Soon after Visa, PayPal also announced that it will now accept payments with Bitcoin, Ethereum, and Litecoin in the U.S. To use the modality, one has to access the function “checkout with crypto”, which became available on March 30.
The advantage is that it will be possible to convert the user’s balance in cryptocurrencies to the dollar without transaction fees. Thus, for purchase outside the U.S., if a merchant does not accept dollars, PayPal converts the amount to local currency.
In October last year, the company had already allowed users to use the platform to buy and sell cryptocurrencies.
Initiatives signal significant changes to traditional means of payment
The companies’ announcements came when there are rumors about the possibility that Mastercard will also start accepting cryptocurrencies for payments.
Other big companies, like Tesla, already accept cryptocurrencies in their transactions. Today, it is already possible to buy an electric vehicle from the company using this payment mode in the U.S. Soon, people can pay perhaps smaller amounts in the same way – in fact, this is what Visa and PayPal signal: greater acceptance, simplicity in use, and ease of conversion.