PayPal announced Tuesday that it will partner with bitcoin payment processors BitPay, Coinbase and GoCoin to allow customers to buy and sell digital products such as online games using the cryptocurrency. The announcement is not an indication that PayPal will transact in the currency, only that the three partners will handle bitcoin processing for PayPal merchants trading in specific businesses.
PayPal, which is owned by eBay, said that it will allow the third parties into its PayPal Payments Hub in part because each of them already offers its customers some level of protection when trading with the still-questionable digital currency. Tuesday’s announcement comes after eBay CEO John Donahoe expressed his admiration for bitcoin on multiple occasions, saying in May that PayPal was “actively considering” integrating bitcoin.
The company maintained that it only sees digital products (i.e., video games and music) being sold utilizing the decentralized cryptocurrency for the foreseeable future. American and Canadian users will be able to use bitcoin first, though PayPal said it is “considering expanding to other markets” soon.
“Merchants were asking for bitcoin integrations,” Scott Ellison, senior director of corporate strategy at PayPal, told Forbes. “Digital goods were an easy way to do it first.... People are comfortable paying online for those things.”
PayPal’s announcement has already been portrayed as more of a test program than a full-fledged embrace of bitcoin. Overtstock.com started accepting bitcoin in January and began permitting international customers to use bitcoin in August. Still, questions have persisted about bitcoin’s volatility and governments’ inability to regulate it.