PayPal Opens the Door to 650M Crypto Users: What the New “Pay with Crypto” Really Means

Key Takeaways

• PayPal’s “Pay with Crypto” supports 100+ cryptocurrencies, including BTC ($110,713), ETH ($4,374), and PYUSD ($0.9991).

• Merchants enjoy 0.99% fees (until mid-2026), instant settlements, and ~4% APY on PYUSD balances.

• PayPal is targeting 650 million crypto users, expanding from its existing 426 million account base.

• The PayPal World wallet alliance (fall 2025) aims to connect nearly 2 billion users across global ecosystems.

• Risks include regulatory approvals, lack of FDIC/SIPC insurance, and uncertain long-term fee structures.

Introduction

The global payments landscape is evolving rapidly, and PayPal is positioning itself at the center of this transformation. By introducing its “Pay with Crypto” feature in 2025, PayPal is bridging the gap between traditional finance and digital assets, enabling seamless cryptocurrency payments for U.S. merchants. This isn’t just another incremental feature — it’s a bold attempt to bring over 650 million crypto users into PayPal’s ecosystem and to connect a $3-trillion crypto economy with mainstream commerce.

From Bitcoin to stablecoins, PayPal is leveraging blockchain-based settlement to make crypto spending as simple as swiping a card, while also giving merchants lower fees, instant settlement, and even yield on stablecoin balances. But what does this really mean for consumers, businesses, and the future of payments? Let’s explore.

What Is “Pay with Crypto” by PayPal?

“Pay with Crypto” is PayPal’s blockchain-powered settlement tool for U.S. merchants. The feature supports payments in over 100 cryptocurrencies, including:

• Bitcoin (BTC) – $110,713

• Ether (ETH) – $4,374

• Solana (SOL) – $206.22

• USD Coin (USDC) – $0.9996

• Tether (USDT) – $1.00

• XRP (XRP) – $2.83

• BNB (BNB) – $858.62

Consumers can spend their preferred crypto assets, while merchants receive payouts in U.S. dollars or PayPal USD (PYUSD) — PayPal’s own dollar-pegged stablecoin, valued at $0.9991.

PayPal handles automatic crypto-to-fiat conversion, ensuring merchants avoid price volatility and experience a settlement process nearly identical to traditional payouts.

Importantly, the system is wallet-agnostic: users don’t need to preload funds into PayPal.

They can simply connect external wallets such as Coinbase Wallet, MetaMask, Binance, Kraken, Phantom, or Exodus at checkout and pay directly.

By embedding this functionality into its wallet, PayPal removes long-standing barriers and offers merchants the ability to accept cross-border payments with instant settlement and stable-value payouts — strengthening its position as a global digital commerce leader.

Over 650 Million Users Could Pay with Crypto on PayPal

In 2025, PayPal’s crypto initiative could become one of the most significant adoption drivers in the industry.

The company’s launch of Pay with Crypto grants access to the broader $3-trillion crypto economy and potentially 650 million crypto users worldwide — a huge leap from its 426 million existing account holders.

By layering stablecoin-enabled transactions onto its infrastructure, PayPal is building a financial bridge between fiat-native users and crypto-native spenders. This includes smooth integration of PYUSD and expanded use of PayPal’s blockchain systems, making crypto more usable in everyday transactions.

The outcome is an inclusive commerce model: PayPal now caters to both traditional card users and the rapidly growing Web3 wallet community.

Why PayPal’s Crypto Settlement Matters for Merchants

Merchants stand to benefit significantly from PayPal’s crypto payment system, enjoying cost reductions, faster settlements, and new income opportunities.

Lower Transaction Fees

• 0.99% promotional fee (valid through mid-2026), far cheaper than the standard 1.5%–3.5% card processing costs.

• Even if fees later rise to ~1.5%, PayPal crypto payments will remain competitive, especially for cross-border sales.

Near-Instant Settlement

• Payouts in USD or PYUSD are nearly immediate.

• Merchants avoid the traditional 1–3 business day waiting period, improving cash flow and eliminating exposure to crypto price volatility.

Stablecoin Rewards

• Holding balances in PYUSD on PayPal yields ~4% APY, transforming idle funds into income-generating assets.

Global Reach for SMEs

• For small and medium-sized businesses, reduced fees and fast settlement open doors to international markets.

• As of mid-2025, PayPal supported 15.4 million active business accounts worldwide, creating fertile ground for crypto adoption at scale.

Cross-Border Crypto Payments: Consumer Benefits

For buyers, using crypto on PayPal is as seamless as traditional checkout methods.

• At checkout, consumers can select “Pay with Crypto”, connect wallets like MetaMask, Binance, Coinbase Wallet, or Phantom, and pay directly with BTC, ETH, stablecoins, and more.

• Conversion from crypto to fiat happens instantly on PayPal’s end. Merchants get a stable payout, while consumers enjoy frictionless payments without manual swaps or volatility concerns.

This integration turns digital assets into real-world currency, extending their use beyond speculation and enabling practical, everyday transactions. It’s especially valuable for non-custodial wallet users who want to spend crypto directly without centralized exchanges.

PayPal’s Broader Vision for Crypto Settlement

PayPal’s long-term ambition goes far beyond U.S. merchants. The company is preparing to launch the PayPal World digital wallet alliance in fall 2025, connecting payment ecosystems like:

• UPI (India)

• Tenpay Global (China)

• Mercado Pago (Latin America)

• Venmo (U.S.)

This initiative could link nearly 2 billion users worldwide with seamless cross-border crypto payments.

To support this, PayPal is strengthening ties with Fiserv, working on stablecoin interoperability between PYUSD and FIUSD. The goal: enable real-time, programmable payments across thousands of banks and millions of merchants — without extra technical overhead.

Such partnerships may position PayPal as a central player in mainstream blockchain payments infrastructure.

Risks and Limitations of PayPal’s Stablecoin Integration

Despite its potential, PayPal’s crypto settlement rollout comes with caveats.

1. Regulatory Hurdles:

   • PYUSD is still awaiting approval from the New York State Department of Financial Services.

   • As a result, New York residents cannot yet use PayPal crypto payments involving PYUSD.

2. User-Side Risks:

   • Crypto assets on PayPal, including PYUSD, are not insured by the FDIC or SIPC.

   • Users face exposure to risks if wallets, custodians, or blockchains fail.

3. Fee Uncertainty:

   • Current fees are attractive at 0.99%, but this expires mid-2026.

   • While a 1.5% rate remains competitive, the lack of long-term clarity could discourage reliance.

Conclusion

PayPal’s “Pay with Crypto” launch represents one of the most significant milestones for mainstream crypto adoption to date. By integrating over 100 cryptocurrencies, enabling instant settlements, and incentivizing merchants with lower fees and stablecoin yields, PayPal is unlocking new pathways for both businesses and consumers.

With 650 million crypto users now within reach, PayPal is evolving from a traditional payments processor into a global blockchain commerce network. Its partnerships, stablecoin integration, and upcoming worldwide wallet alliance suggest this is just the beginning of a broader strategy to merge Web2 and Web3 finance.

While regulatory and insurance risks remain, PayPal’s move may mark the turning point where crypto transitions from a speculative asset class into a mainstream payment method for billions worldwide.

FAQs

What cryptocurrencies can I use with PayPal’s “Pay with Crypto”?

You can pay with over 100 cryptocurrencies, including Bitcoin, Ether, Solana, XRP, USDC, Tether, BNB, and more.

Do merchants receive crypto or fiat payments?

Merchants can choose to receive payouts in U.S. dollars or PayPal’s stablecoin, PYUSD, with instant conversion handled by PayPal.

Are PayPal crypto balances insured?

No. Crypto balances, including PYUSD, are not insured by the FDIC or SIPC. Users face risk if a wallet, custodian, or blockchain fails.

How much are PayPal’s crypto transaction fees?

PayPal currently charges 0.99% per transaction (through mid-2026). Afterward, fees are expected to rise to around 1.5%.

Can I use PayPal’s crypto payment service worldwide?

For now, “Pay with Crypto” is only available for U.S. merchants, but PayPal plans to expand through the PayPal World wallet alliance in late 2025.