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PayPal enables US customers to trade Bitcoin in 2021, and a number of companies are competing with credit cards for this.
When it comes to using Bitcoin as a means of payment, opinions are divided. Admittedly, the Bitcoin Pizza from 2010 with a price of 10,000 BTC is in retrospect the most expensive dish of all time.
But despite this finding, paying with Bitcoin and other cryptocurrencies still has its own attractiveness. After all, the technology is intended for this and at the same time the value of BTC increases, because if Bitcoin is required as a means of payment, then more interest arises and so the demand increases.
But many retailers and online shops are still struggling to implement it. After all, they mostly rely on companies to handle the payments for them. And although credit cards that can be fed with Bitcoin are not an innovation, they are enjoying great popularity.
Coinbase is under pressure from PayPal
After the announcement by PayPal, the industry giant Coinbase apparently felt addressed directly and countered with a debit card that can be fed directly with Bitcoin.
However, the product will only be a novelty for consumers in the USA, as customers in Europe and the UK have been able to use the option since 2019. However, whether this is a tried and tested means against PayPal cannot be positively confirmed right away. Because PayPal already has a customer base that is second to none.
Thus, the payment service provider is changing to a Bitcoin broker and has very good cards to compete with Coinbase in this sector. In principle, Coinbase’s card will have to be about retaining customers. If they migrate to PayPal once, they are unlikely to come back anytime soon. Although Coinbase charges very high fees in comparison, a large number of customers are happy to pay the surcharge. Because Coinbase scores primarily with its simple, but convenient operation. This simplicity is well received by many customers who want to buy Bitcoin but do not want to be overloaded with the technology behind it.
But that’s exactly what PayPal is particularly good at. Shopping, transferring money and now also trading Bitcoin is practically becoming a convenience product thanks to the group.
An oversupply of Bitcoin credit cards
In addition to the competition from PayPal, the Bitcoin credit card segment is also getting busier. Binance offers its own and Crypto.com has already been able to retain many customers with its product.
In addition, there is a flood of credit cards from fintech companies that have a close connection to the crypto markets. Including Revolut, Bitwala, Xapo and Wirex. While the credit cards are more of a means of customer loyalty for the stock exchanges by embedding them in an in-house ecosystem, for the fintechs they are an integral part of livelihood.
In this sense, it is not just Coinbase that is coming under increasing pressure, but also all providers who primarily offer Bitcoin trading.