Businesses today are trying to get a piece of the action as the popularity of cryptocurrencies is still quite there, that is despite the fact that the price is currently showing a downward trend. Over the past year, cryptocurrencies have managed to reinvigorate many businesses. Some are even turning to becoming an ICO in order to gather funds.
This isn’t really just about the hype. In fact, blockchain tech really does have something to offer to the table. Just imagine removing third parties in your transactions? For this reason, it has captured the interest of PayPal.
Despite the upward trajectory of their income from $3 billion in 2010 to $13 billion in 2017, the company is taking a closer look at the possible competitor that is the blockchain technology. According to their foresight, if PayPal maintains their current business model, they are in danger of becoming obsolescent or worse, obsolete in the coming years.
PayPal’s Function
Paypal’s function is to make things easier for both merchants and for customers. They are able to tolerate the 5% charge per transaction by using the platform. However, in order to pre-empt problems in the future, PayPal has already filed a patent application for an “expedited virtual currency transaction system”.
It isn’t surprising that PayPal is headed towards decentralized cryptos. In fact, it is PayPal’s ambition to provide quick transactions that are inexpensive in different parts of the world. Since current PayPal’s structure has no other choice but to partner with financial institutions that could add costs and even delay transactions to some extent, distributed networks such as that of Bitcoin could be a good alternative to this problem.
Crypto-Based Payment?
While all we know is that they are planning to have “an expedited virtual currency transaction system”, it could possibly be a hint that PayPal is moving towards a cryptocurrency-based payment system that does not give the same problems as that of Bitcoin.
The thing with Bitcoin is that it sacrifices both speed and the cost. In fact, this is a problem that a lot of miners also face. In addition to this, the highly volatile nature of Bitcoin along with other existing cryptocurrencies makes it difficult for businesses to adopt the technology for good.
PayPal CEO Dan Schulman has been able to speak about the possible opportunities as well as the obstacles of cryptocurrencies. He said that “regulations need to be sorted out along with a whole number of other things. It’s an experiment right now that is very unclear as to the direction it will go in”. Though it sounds like Schulman is hesitant towards cryptocurrencies, the patent could be a hint that the company is not really disregarding the possibility of becoming involved in the crypto-market.
It is true that there are a lot of things that should be fixed in the crypto market. However, PayPal staying ahead in the game is a smart move on their part considering that they don’t want to become an obsolete company. In fact, a company such as Western Union is also testing crypto solutions in order to ensure the best service to their clients.
