PayPal's fees alone come in at 4% — and that's without taking into account what Coinbase charges.
Coinbase has announced that it will now allow customers in the U.S. to purchase cryptocurrencies using their PayPal account.
The exchange, which recently made its stock market debut on the Nasdaq, said this should streamline the process for those who want to top up their wallets using debit cards and bank accounts. In a news release, Coinbase said:
“Buying crypto should be simple and easy. However, moving money in the traditional world of finance can be anything but. ACH and wire transfers can take time and effort, and we know you are expecting faster and more seamless ways to make crypto purchases.”
Although there are advantages from a convenience standpoint, there are downsides. One of them is this will attract PayPal fees of up to 4% — on top of the costs that Coinbase levies. This will water down the amount of crypto that users are getting for their dollars. A daily limit of $25,000 is also in place, but this won’t be a concern for most users.
Why Not Use PayPal?
Some may ask why crypto enthusiasts wouldn’t just use the crypto service that PayPal itself has launched. However, the number of digital assets it currently offers is limited to Bitcoin, Ether, Litecoin and Bitcoin Cash. The limits on the volumes of crypto that can be purchased is also markedly lower.
We could end up seeing Coinbase roll out this feature to other markets in the coming months. Indeed, PayPal is also planning to boost its crypto offering. In March, the payments giant enabled millions of merchants to accept digital assets from U.S. customers — and the U.K. has been confirmed as the first international market where its crypto service will launch.