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PayPal CFO John Rainey said in an interview with CNBC May 16, that the company doesn’t see much interest in digital currencies because price volatility threatens the viability of their merchants’ businesses.
Centralized payment service PayPal was a pioneer in accepting cryptocurrencies. Merchants could opt-in to accept Bitcoin (BTC) on the platform as far back as 2014, when BTC was worth around $400. Today, Rainey stated that PayPal currently doesn’t see much interest in digital currencies from their merchants, as the volatile nature of cryptocurrencies can cause contingent losses, explaining:
“If you’re a merchant and you have, let’s say, a 10 percent margin on a product that you sell and you accept Bitcoin, for example, and the very next day it moves 15 percent, you’re now underwater on that transaction… You could have something that appeals to consumers, but if merchants don’t accept it, it’s of little value. Right now, we don’t see a lot of interest from our merchants.”
“But if it’s something that stabilizes in the future and is a better currency, then we’ll certainly support that,” he added.
The latter statement supports PayPal’s patent filed in March, which aims to speed up cryptocurrency transaction times. If the technology can be implemented at a large commercial scale, it could allow cryptocurrency payments to be processed between merchants and buyers instantly and off-chain, eliminating large transaction fees and long verification periods.
Today, Square CEO Jack Dorsey expressed optimism toward digital currency adoption on a global scale. At the Consensus conference, Dorsey shared his vision that cryptocurrencies are the future of a legitimate means of global payment, which reaffirms his previous comments that Bitcoin will become the world’s “single currency” within a decade.