PayPal and bitcoin has had a long relationship with each other, with most of it being problematic. The issues in the past have come up from users wanting to sell bitcoin and accept PayPal as a payment method. Due to PayPal’s buyer protection policies, users have 180 days to contest a transaction.
In the past, this has become an issue because buyers would contest a bitcoin transaction several days or weeks after completion and receiving the bitcoin, disputing with PayPal they didn’t receive the bitcoin. PayPal has typically sided with buyers making PayPal a difficult form of payment, where many won’t even accept PayPal as a form of payment for bitcoin.
Since one of bitcoin’s main properties is that it’s irreversible, just like cash, paying for bitcoin with PayPal hasn’t worked well. However, Coinbase is looking to change this.
Coinbase the bitcoin exchange (acting as a brokerage), which is separate from their GDAX exchange, has added a new feature which allows users to sell bitcoin to Coinbase and have the funds deposited to your PayPal account. As pictured below, the new feature is an option for instant sells.
In a new update from Coinbase, they said that thousands of Coinbase users use PayPal for their fiat currency transactions around the world. To start, Coinbase is offering PayPal as a cash-out payment method for U.S. users only. In the future, they hope to add support for other countries, and to support buys through PayPal too.
Coinbase is able to take on this risk of fraud simply due to their size and money-flow that smaller exchanges or individuals may not want to take on. It’s also possible that Coinbase has been working with PayPal prior to going public with this integration in a business relationship to ensure transactions to PayPal flow correctly and aren’t erroneously flagged. If so, this could be a vote of confidence that PayPal maybe putting their toes in the water toward one day possibly using and accepting bitcoin.
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