Why Bitcoin will not kill PayPal
To a casual observer, PayPal might seem like a dying payment program. It was once the main pioneer in online cash sharing, either for business or peer-to-peer transactions. But in a way, it’s been outstripped by some more modern competitors. In this sense, it seems like the AOL of the mobile payment industry. Services like Venmo and Square have become sexier, much like alternative email providers and browsers have largely eclipsed AOL.
But the tech that seems to pose the main threat is Bitcoin. The leading cryptocurrency is growing at an astonishing pace, and because it’s meant to facilitate easy digital payments, it can be viewed by some as a sort of death sentence not just for PayPal but for all of the payment services mentioned above. We recently learned that Bitcoin will soon beat PayPal’s market cap, which could only further the perception that it’s going to lay waste to conventional payment apps. But this outlook doesn’t really take all of the factors into consideration. A more thorough look at where things stand indicates that PayPal probably isn’t going anywhere anytime soon.
For one thing, PayPal actually owns much of its competition—a lot of people just don’t realize it. The company acquired Venmo some time ago, and just recently bought Swift. It’s a massive company that has managed to foster a sense of competition between its own assets. Square is a legitimate alternative that seems to have gained some ground, largely by being more intuitive and more pleasant to handle than Venmo. But don’t let the advent of newer or easier payments systems fool you into thinking PayPal is a relic. It’s a big business that has mostly stayed ahead of the curve thanks to savvy management.
Another misconception is that Bitcoin is useful for secure transactions in ways that PayPal is not. While cryptocurrency does offer unparalleled anonymity, however, this is simply not the case. Online casinos offer perhaps the clearest picture as to why, given that Bitcoin has recently emerged as a payment method at some platforms. Players like the idea of security and anonymity when playing real money games. And yet, PayPal has long been favored on the same platforms precisely because bank account details and card information are not shared. There’s already a degree of security with these and other forms of payment that can be enjoyed without the need to buy and store Bitcoin.
Most of all, the reason for PayPal’s likely survival, even in the face of the growing influence of cryptocurrency, is that it’s still the most familiar service. This could change over time, but Bitcoin is still viewed as a complex and unnecessary option by many people. In today’s society, you more or less have to have a credit card, and thus you can easily open a PayPal account. You don’t need Bitcoin at all, you can have it if you want it. As long as this remains the status quo, PayPal is going to be doing just fine, and may still be our most reliable means of transferring funds electronically.