John Rainey, Paypal’s CEO claims that the volatility of Bitcoin was the reason why its merchants have not taken a lot of interest in the cryptocurrency. This perspective seems to be a little surprising since previously, the company has been known to be toying with Bitcoin acceptance through its Braintree integrated payment solution since 2015.
According to Rainey, as a result of the volatility of the cryptocurrencies, it is very possible for their merchants to end up in losses if they used cryptocurrencies. For instance, in case a merchant has, say a 10% margin on a particular product that they sell accepting Bitcoin, should there be a slight increase the following day, such a transaction will result in losses instead of profits.
It is worth noting that since 2015, the volatility of Bitcoin has significantly been curbed, even though merchant practices of instantly converting funds to fiat is likely to change soon. According to Bitcoinist, advances in the Bitcoin currency capabilities in the form of Lightning Network continue to pressure both merchant processors and fiat-based solutions.
Braintree’s average charges of 2.9% in addition to a $0.30 flat fee for every transaction has become a subject of direct comparison to Bitcoin payments through Lightning-enabled payment tools, where apparently, merchants are charged nothing. Though it is still in its formative years, Lightning has a considerable total network capacity of slightly below $170,000.
However, in spite of Bitcoin’s volatility, Rainey maintains that Paypal has not necessarily given up on Bitcoin. This is because even though the company does not see a lot of interest in the cryptocurrency from their merchants, any indication of stability in the near future as a better currency will be fully supported by Paypal. This is an indication of willingness to cooperate.