updated - October 29, 2020 Thursday EDT
PayPal is levelling up its e-commerce business with the adoption of Bitcoin, a online payment system using digital currency.
Bitcoin is a software-based online payment system using its own virtual currency or cryptocurrency unit, the "Bitcoin."
PayPal, an international e-commerce giant that pioneered online payment, is teaming up with other companies using Bitcoin as a mode of payment.
PayPal announced on Tuesday that it was working with Bitcoin processors BitPay, CoinBase and GoCoin.
Online buyers can now pay for digital goods like online games and downloadable songs using Bitcoin.
The adoption of Bitcoin in Paypal did not come as a surprise, however, since it's subsidiary, Braintree, revealed that it was making an application that allowed customers to make transactions with Uber and Airbnb using Bitcoin.
Paypal announced that Braintree will be able to accept bitcoin payments already by paying through Coinbase.
Despite the bold move, Paypal is still testing the waters, according to Scott Ellison, Senior director of corporate strategy at PayPal.
"Merchants were asking for Bitcoin integrations. Digital goods were an easy way to do it first...People are comfortable paying online for those things," Ellison stated.
The BitCoin feature will be limited to businesses in North America.
Other companies have likewise adopted BitCoin as a mode of payment. Overstock.com started using the digital currency in Jan. while Payments Company Square has allowed local businesses to pay using the cryptocurrency in March.
Since the transactions in PayPal involving BitCoin are limited only to digital goods, PayPal is diminishing the risks of fraud associated with the digital currency.
PayPal CEO John Donahoe expressed his fascination with BitCoin last June, and foresees that the company will have to incorporate the digital currency soon.
For now, PayPal has taken a small step towards adopting Donahoe's vision. Ellison stated that the company is slowly materializing the CEO's plan.
"Here we are with two back-to-back announcements, first with Braintree and now the payments hub. We are certainly encouraging more Bitcoin use," Ellison stated.
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