PayPal is mainly known as an online payment method. But the company wants to be an easy way to get started with crypto. In that regard, ConsenSys, the company behind MetaMask, announced that it will add an integration in its crypto wallet so that users can buy crypto using their PayPal account.
MetaMask is one of the most popular non-custodial crypto wallets out there. It allows you to store crypto assets and interact with web3 products because you can use your wallet as an authentication method.
But there’s not much you can do if you have an empty MetaMask wallet. That is why users rely on centralized crypto exchanges like Coinbase, Kraken, and FTX to buy cryptocurrencies and transfer them to their MetaMask wallet. MetaMask also has its own on-ramps features in the mobile app so you don’t have to switch to another service and go through a lot of intermediary steps. Partners on the ramp include MoonPay, eagle and Transmission.
If you buy crypto with one of those partners, you will have to go through a KYC (“know your customer”) process. That means you’ll have to enter a bunch of personal information and verify your identity with some form of ID.
The partnership between MetaMask and PayPal will benefit both companies. On the MetaMask side, it’s very likely that the conversion rate with current on-ramps solutions is not high. KYC processes can be intimidating.
There are now 430 million PayPal accounts in the world according to the company’s most recent report. income statement. If a MetaMask user sees a large button that says you can buy crypto with a PayPal account, that sounds easy and familiar. For PayPal, more activity means more revenue.
At first, MetaMask users will only be able to purchase Ethereum (ETH) with PayPal as a payment method. It will be available to some users in the US before it is rolled out to everyone in the US
If you already have ETH in your PayPal account, you can use that ETH to fund your MetaMask wallet. If that’s not the case, PayPal will help you buy ETH using your PayPal balance or other payment methods.
And that will generate some revenue for PayPal as a company fees and charges to buy cryptocurrencies. This is PayPal’s first integration as an on-chain provider for web3 wallets. But I wouldn’t be surprised if we see more PayPal buttons in crypto wallets in the future.
Earlier this year, PayPal also more support for electronic money transfer. PayPal users in the US can obtain a wallet address to fund their PayPal accounts with crypto assets. Similarly, PayPal users can send funds to third-party crypto wallets.
Since many people consider cryptocurrencies as internet money, they think that cryptocurrencies can completely replace PayPal as a way to send and receive money from computers and phones. But there will always be a bridge between a traditional bank account and a crypto wallet. And PayPal plans to take advantage of that.