Will PayPal really use bitcoin?

[hgmichna]

The PayPal president David Marcus mentioned in an interview that he is currently thinking about bitcoin and pondering the thought of using it for funding.

My first thought was that he was just stonewalling and spreading false information to confuse and stall, because bitcoin is a threat to PayPal.

As far as eBay transactions are concerned, even a total switch from the current PayPal system to bitcoin would not diminish eBay's profits, because they could still take their high percentages on each sale. They could use bitcoin along with traditional money and profit just like before.

However, PayPal is currently trying to expand its business to non-eBay transactions, in effect trying to become a new global player in the money transfer field. They could kiss that business goodbye, as soon as people noticed that with bitcoin they would not need PayPal any more.

Has anybody followed PayPal's global plans and can comment on these thoughts?

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[Its About Sharing]

I agree, BTC can do nothing but help to destroy Paypal. The CEO said it could be a funding mechanism for Paypal??? Is it really a problem to fun Paypal accounts?

The only problem I see is funding BTC accounts and that is being worked on. Paypal's fee's are just too high to be a longterm funding mechanism for BTC accounts.

Now, maybe they try to alter their business model to adapt to BTC's for a bit of business is better than going out of business. Anything is possible, but I say the CEO was talking out his...

[anu]

I agree, BTC can do nothing but help to destroy Paypal. The CEO said it could be a funding mechanism for Paypal??? Is it really a problem to fun Paypal accounts?

You are confusing something. Bitcoin may destroy the current business model of PP. But why PP itself? I think Bitcoin is a dream come true for hedge funds, investment banks, and yes, payment processors.

[herzmeister]

I think it's not true that PayPal want to confuse or mislead anyone. Bitcoin is a low-level protocol. The largest part of the population cannot use it in its raw form, just like they don't use the Linux shell.

There'll always be a market for higher level services that offer online accounts, customer support, chargebacks, dispute resolutions etc... It's rather that PayPal will compete with BitPay. They'll also become a Ripple gateway if ripple.com becomes a success.

[anu]

I think it's not true that PayPal want to confuse or mislead anyone. Bitcoin is a low-level protocol. The largest part of the population cannot use it in its raw form, just like they don't use the Linux shell.

There'll always be a market for higher level services that offer online accounts, customer support, chargebacks, dispute resolutions etc... It's rather that PayPal will compete with BitPay. They'll also become a Ripple gateway if ripple.com becomes a success.

This!

Remember how we all thought that the Internet would break the dominance of Microsoft in 1994? The Internet destroyed some of the basic assumptions underlying MS's business model. But MS adapted their business model in no time at all and was able to ride the Internet wave beautifully.

Remember how Linux fans thought of their system as the antithesis of proprietary models? Not reconcilable? Untill Oracle and IBM and many others adopted it?

PP may do the same once Bitcoin gets big enough. They will adapt and come out stronger than before. That's what businesses do: They surf the waves. Bitcoin can make a lot of big waves and create loads of opportunities. And if they don't - all the better for OKPAY.

[Babylon]

If Paypal makes it easier to turn paypal money into bitcoins that will make me happy.  I have  a hard time turning paypal money into anything.

[lucif]

What a stupid herd...

Paypal ceo in somewhat long interview told for 10 seconds that he likes bitcoin design.

This is all. Nothing more. I tell this to my friends every time.

All other - sick imagination.

Paypal and others are legal payment systems which require full client identification. They are absolutely not compatible in any way with Bitcoin. Bitcoin is from another planet. Or even from another galaxy.

[gogxmagog]

 maybe he's been lurking these boards and has seen how many people are eager to buy btc with paypal. 

[lucif]

Yeah, and how paypal banning accounts when know that they are involved into trading bitcoin.

[lucif]

https://www.google.com/search?q=bitcoin+paypal+account+blocked+site:bitcointalk.org

[bitleif]

Paypal and others are legal payment systems which require full client identification. They are absolutely not compatible in any way with Bitcoin. Bitcoin is from another planet. Or even from another galaxy.

Not planet or galaxy, but century. PayPal bridges the gap between 20th century money and the 21st century internet. Bitcoin is pure internet, in fact I view it as an inevitable consequence of the internet, one of many more to come.

[lucif]

Yeah, century. This is correct. Paypal and Bitcoin are so different, so they can not cooperate in any way.

[anu]

Yeah, century. This is correct. Paypal and Bitcoin are so different, so they can not cooperate in any way.

Paypal can't cooperate with cash. But why exactly can't they cooperate with Bitcoin?

[lucif]

Yeah, century. This is correct. Paypal and Bitcoin are so different, so they can not cooperate in any way.

Paypal can't cooperate with cash. But why exactly can't they cooperate with Bitcoin?

You should ask this in Newbies section.

[Babylon]

Yeah, century. This is correct. Paypal and Bitcoin are so different, so they can not cooperate in any way.

Paypal can't cooperate with cash. But why exactly can't they cooperate with Bitcoin?

Paypal does cooperate with cash, Paypal cooperates better with cash than Bitcoin does.  Paypal isn't a currency, it is just a service.  It requires the bank as an intermediary between it and cash, but it is way easier to find paypal than bitcoin from cash.

[SAQ]

Yeah, century. This is correct. Paypal and Bitcoin are so different, so they can not cooperate in any way.

Well paypal could be an entry point to bitcoins. Fiat and bitcoin interacts all the time. Paypal could be a middle man managing that interaction. Moreover, they own ebay too, so they would get a free transaction infrastructure supported by all those miners - i.e. everyone. 

[Babylon]

Yeah, century. This is correct. Paypal and Bitcoin are so different, so they can not cooperate in any way.

Well paypal could be an entry point to bitcoins. Fiat and bitcoin interacts all the time. Paypal could be a middle man managing that interaction. Moreover, they own ebay too, so they would get a free transaction infrastructure supported by all those miners - i.e. everyone. 

All the bitcoins I have bought were purchased with paypal.  Way back when that was how you put money on MTGox.

You shoulda seen the panic when Paypal stopped allowing that.

[Crazy]

I don't see them ever legitimizing BTC. Why would they? Just shortening their lifespan.

[bassclef]

I don't see Paypal adopting bitcoin either.

What we really need is an Ebay alternative that uses bitcoins. A lot of people don't like Ebay (myself included) but begrudgingly endure it because they have basically cornered the internet auction market. There is a huge opportunity there.

[Frozenlock]

I don't see why Paypal wouldn't use Bitcoin.
They are a business, they don't care about how they make their profit, they just want to make it.

It's like the people saying that oil companies are against wind/geothermal/nuclear/coal power.
No they are not. They are in the business of distributing energy.

Paypal is in the business of processing payment. With credit card companies ready to add new fees for "internet transactions",
they would be rather happy to switch to a more economical way.

[pinger]

The only use of paypal to Bitcoin is to be used like a scrow, just like they are doing now with fiat money.

[Tirapon]

The only use of paypal to Bitcoin is to be used like a scrow, just like they are doing now with fiat money.

Yeah why don't they just gradually change their business model. First they could accept Bitcoin alongside the service they already provide, then they could offer escrow and with their massive user base become one of the major escrow services.

Not necessarily saying this is going to happen, but I find it annoying to read the posts saying 'bitcoin would destroy paypal therefore no chance of adoption'. Bitcoin would destroy paypal's current business model, but many businesses adapt and survive when disruptive technologies are created.

[Zaih]

I would LOVE to see this actually go through. It would be amazing for Bitcoin.

[Stunna]

I highly doubt paypal will pick up bitcoin at this moment, once bitcoin picks up more steam though, it will be impossible for them to ignore it.

[Babylon]

I don't see Paypal adopting bitcoin either.

What we really need is an Ebay alternative that uses bitcoins. A lot of people don't like Ebay (myself included) but begrudgingly endure it because they have basically cornered the internet auction market. There is a huge opportunity there.

There used to be a site called bidpond, back at the beginning of bitcoin.  Apparently it died.  I bet if you set up a bitcoin auction house you could make a lot of money.  I might even try doing that.

[Its About Sharing]

I agree, BTC can do nothing but help to destroy Paypal. The CEO said it could be a funding mechanism for Paypal??? Is it really a problem to fun Paypal accounts?

You are confusing something. Bitcoin may destroy the current business model of PP. But why PP itself? I think Bitcoin is a dream come true for hedge funds, investment banks, and yes, payment processors.

After reading this article: http://www.forbes.com/sites/jonmatonis/2013/05/04/bitcoin-on-the-paypal-network/ I tend to now agree with you, at least I'm a bit mixed.
There were some points brought up that were obvious but I had never thought of. I strongly recommend people to have a look at the article.

A key section imo (my bold):

Phil Archer writing at The Genesis Block categorized the four areas of likely impact — online wallets, escrow services, merchant processing, and exchange services. PayPal account funding alone is not exactly bitcoin sitting on the PayPal payments network, so that use case is not included in the analysis. Archer concludes that PayPal’s immediate advantage would be in the first two areas with eventual game-changing impact probable in the latter two.

While I tend to agree with the category choices, the analysis overlooks what the PayPal-Bitcoin world would not be getting (or, what it would be losing).

Firstly for the consumers, the new PayPal paradigm would look like a Coinbase on steroids with massive connectivity into your bank accounts and even more intrusive data collection. As a fully-regulated money services business (MSB) and licensed money transmitter, PayPal would be the undisputed gorilla in the U.S. marketplace with online wallets and fast exchange services. Of course, escrow services would be welcomed because this model is almost always needed in a free market and banks could look to provide this functionality as well.

It is not all rosy, but Paypal might help to direct more funds and eyes towards BTC.

[batcoin]

I read all these threads about PayPal and Bitcoin and can't help but think of the correlation between postal services and email. Yes, Bitcoin is a bit technical to use at this point, just as email was during its infancy. Few people used it partly for that reason and partly because it was an emerging technology. But that will change in time. Bitcoin will continue to emerge and develop into a more user friendly application. Companies like PayPal will have to focus on providing other services. Who uses a postal service to send their email after all?

[lebing]

Yeah, century. This is correct. Paypal and Bitcoin are so different, so they can not cooperate in any way.

Paypal can't cooperate with cash. But why exactly can't they cooperate with Bitcoin?

You should ask this in Newbies section.

Dont mind Lucif. He thinks that posting on the forums somehow gets rid of the sand in his vagina.

[lebing]

Its inevitable that paypal will accept bitcoin as they will feel the pressure from the protocol itself and from competitors. This is the reason they arent talking badly about bitcoin - they know they need to co-opt it or die. you dont have C-levels of a company calling it "the perfect form of money" without plans for it. The question is what exactly do they plan with it. It could be as simple as another wallet or as complicated as a full blown exchange... only time will tell and my guess is that it won't take much before we see what form it will take.

[Babylon]

I read all these threads about PayPal and Bitcoin and can't help but think of the correlation between postal services and email. Yes, Bitcoin is a bit technical to use at this point, just as email was during its infancy. Few people used it partly for that reason and partly because it was an emerging technology. But that will change in time. Bitcoin will continue to emerge and develop into a more user friendly application. Companies like PayPal will have to focus on providing other services. Who uses a postal service to send their email after all?

Postal service is mostly for sending things which are too official for e-mail nowadays, and, of course, shipping goods.

[GigaCoin]

Bitcoin will be good for paypal, i don't see it destroying their business model at all, it can infact complement it once proper infrastructure is in place. Fiat will still be large scale it's not going anywhere for now, so their fiat revenue will continue.

[anu]

I don't see them ever legitimizing BTC. Why would they? Just shortening their lifespan.

Quite possible. It depends on whether they feel they run an empire or a company.

[ManBearPig]

What a stupid herd...

Paypal ceo in somewhat long interview told for 10 seconds that he likes bitcoin design.

This is all. Nothing more. I tell this to my friends every time.

All other - sick imagination.

Paypal and others are legal payment systems which require full client identification. They are absolutely not compatible in any way with Bitcoin. Bitcoin is from another planet. Or even from another galaxy.

I'll except myself from that generalisation thank you.

PayPal, Western Union or whoever could easily put a wrapper around Bitcoin transactions and maintain their modus operandi.

They could own a chunk of BTC themselves for example - come on, stretch your brain a little and don't be as stupid as you accuse others of being.

[dandirk]

The only reason I see PayPal offering some sort of BTC service is if it won't make money (not popular enough, used enough etc) AND BTC price would have to be relatively stable (like fiat).

PP could easily offer a bitpay type service...  Where they don't deal specifically with holding and training BTC but convert it to fiat, just like they do to other fiat.

[noedaRDH]

Paypal might be able to lower its spending on human resources by using the Bitcoin infrastructure and dissolving/shrinking some of its existing departments.

[phelix]

The PayPal president David Marcus mentioned in an interview that he is currently thinking about bitcoin and pondering the thought of using it for funding.

My first thought was that he was just stonewalling and spreading false information to confuse and stall, because bitcoin is a threat to PayPal.

As far as eBay transactions are concerned, even a total switch from the current PayPal system to bitcoin would not diminish eBay's profits, because they could still take their high percentages on each sale. They could use bitcoin along with traditional money and profit just like before.

However, PayPal is currently trying to expand its business to non-eBay transactions, in effect trying to become a new global player in the money transfer field. They could kiss that business goodbye, as soon as people noticed that with bitcoin they would not need PayPal any more.

Has anybody followed PayPal's global plans and can comment on these thoughts?

1.) He only said they were considering it. Why should that be false information?
2.) They weigh these issues: making a competitor more popular vs. making money from accepting Bitcoin

Even if they would convert Bitoin into PayPal USD for free they would still make a ton of profit from their horrendous fees. If they would let you convert on demand it might be really useful, somewhat similar to a Bitcoin credit card.