John Rainey, Chief Financial Officer of PayPal Holdings Inc (NASDAQ:PYPL) said the merchants are distancing away from digital currency because of price volatility.
PayPal is a leader in accepting cryptocurrencies. The merchants also could accept the digital currency Bitcoin (BTC) since 2014 on the platform when the bitcoin was around $400. According to PayPal, merchants are not showing interest because of the price volatility associated with the crypto. The price volatility of the crypto causes huge losses for the merchants.
For example, if a merchant has a 10% margin in a particular product and sells that product by accepting the cryptocurrency. On the very next day, the crypto moves down by 15%, it causes loss to the merchant. Therefore, merchants are hesitant to accept the digital currency.
The interest in the digital currency will increase if it becomes stable. The company will be able to support if it become stable in the future.
The patent filed by PayPal in March expedites transaction time of the crypto. If the crypto is implemented on a large scale for commercial use, it allows the use of cryptocurrency for payments between the buyers and merchants for instant transactions. It eliminates the long verification periods and higher transaction fees.
Established in 1998, PayPal has a user base of 237 million. The payment volume of PayPal is estimated at $132 billion in Q1 2018, an increase of 30 billion since Q1 2017.
Jack Dorsey, Chief Executive Officer of Square Inc (NYSE:SQ) has expressed optimism towards the adoption of crypto across the world. According to Dorsey, Bitcoin is expected to be the single currency on a global scale in just 10 years.
Jack Ma of Alibaba Group Holding Ltd (NYSE:BABA) Sees Stability in Bitcoin
The founder of Alibaba Group Holding Ltd (NYSE:BABA), Jack Ma said Bitcoin is very reliable and stable. It is not a bubble. He strongly believes that there is a strong potential in bitcoin to address the issues like security and data privacy. The annual revenues of Alibaba are reported at $39.9 billion in Q4.