PayPal is best known as an online payment method. But the company wants to become an easy way to get started with cryptocurrencies. In that regard, ConsenSys, the company behind MetaMask, announced that it would add an integration into its crypto wallet so that users can buy cryptocurrencies 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 as you can use your wallet as an authentication method.
But there’s not much you can do if you have an empty MetaMask wallet. Therefore, users rely on centralized cryptocurrency exchanges such as Coinbase, Kraken
and FTX to buy cryptocurrencies and transfer them to their MetaMask wallet. MetaMask also has its own on-ramp features in its mobile app, so you don’t have to switch to another service and go through many intermediate steps. Partners on the ramp are MoonPay, Wyre and Transak.
If you buy crypto from one of those partners, you have to go through a KYC process (“know your customer”). It means entering a bunch of personal information and verifying your identity with some kind of ID.
The collaboration between MetaMask and PayPal will benefit both companies. On the MetaMask side, chances are the conversion rate with existing on-ramp solutions isn’t great. KYC processes can be intimidating.
According to the company’s most recent earnings report, there are already 430 million PayPal accounts in the world. When MetaMask users see a big button that says you can buy cryptocurrencies with a PayPal account, it sounds easy and familiar. When it comes to PayPal, more activity means more revenue.
Initially, MetaMask users will only be able to purchase Ethereum (ETH) using PayPal as a payment method. It will be available to some users in the US before rolling 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 not, PayPal will help you buy ETH using your PayPal balance or other payment methods.
And that’s going to generate some revenue for PayPal as the company charges to buy cryptocurrencies. This is PayPal’s first integration as an on-ramp provider for a web3 wallet. But I wouldn’t be surprised if we see more PayPal buttons in crypto wallets in the future.
Earlier this year, PayPal also added support for crypto transfers. PayPal users in the US can get wallet addresses to fund their PayPal account with crypto assets. Likewise, PayPal users can send funds to a third-party crypto wallet.
Since many people think of cryptocurrencies as internet money, they think that crypto can completely replace PayPal as a way to send and receive money to and from a computer and a phone. But there will always be bridges between traditional bank accounts and crypto wallets. And PayPal plans to take advantage of that.