PayPal Launches 100+ Crypto Payment Options for U.S. Merchants with 0.99% Initial Transaction Fee

PayPal Inc. has expanded its digital payment infrastructure by introducing a crypto checkout feature for U.S. merchants, enabling the acceptance of over 100 cryptocurrencies—including Bitcoin (BTC), Ethereum (ETH), and memecoins like TRUMP and FARTCOIN—at point of sale. The service, branded “Pay With Crypto,” converts customer payments into U.S. dollars or PayPal’s stablecoin, PYUSD, in real time, depositing funds directly into merchants’ accounts without requiring separate crypto wallets or exchanges [1]. This integration leverages third-party wallets such as MetaMask, Binance, and Coinbase, streamlining the process for businesses to transact in fiat while customers pay with digital assets. The feature, which began rolling out in mid-July 2025, aims to reduce cross-border payment barriers by offering instant settlements and lower transaction costs compared to traditional credit card fees, which typically range between 2% and 4% [1].

For the first 12 months, merchants will face a reduced transaction fee of 0.99%, rising to 1.5% thereafter. PayPal’s CEO highlighted the initiative’s potential to enhance global trade by removing “costly intermediaries and conversion delays” associated with conventional payment systems [1]. However, the rollout is accompanied by regulatory hurdles. PayPal’s stablecoin, PYUSD, remains under scrutiny by the New York State Department of Financial Services (NYDFS), which has not yet granted approval, restricting its use in the state. This regulatory gap could hinder adoption in New York, a key financial hub. Additionally, neither PYUSD nor the supported cryptocurrencies are insured by the FDIC or SIPC, leaving users and merchants exposed to risks such as technical failures or insolvency [1].

The launch aligns with the broader implications of the newly enacted GENIUS Act, which curtails interest-earning on stablecoins and redirects their focus toward payment use cases. While this has encouraged companies like PayPal to prioritize low-cost, high-speed solutions, the absence of federal safeguards and unresolved state-level approvals remain significant challenges. The feature’s success will depend on how effectively PayPal navigates these regulatory complexities and builds trust in the stability of its digital assets [1].

PayPal’s move reflects a strategic pivot to bridge decentralized finance with traditional commerce. By supporting a diverse range of tokens, including volatile memecoins, the company positions itself at the forefront of mainstream crypto adoption. The integration of decentralized exchanges like Uniswap for unsupported tokens further underscores its commitment to simplifying crypto transactions for businesses. Yet, the lack of insurance and regulatory clarity could deter risk-averse merchants, particularly those unfamiliar with the crypto ecosystem [1]. Analysts note that while the GENIUS Act’s emphasis on payment efficiency may stabilize the market long-term, compliance costs could temper innovation if regulatory demands outweigh cost savings [1].

The service’s introduction comes at a time when global businesses are actively seeking low-cost alternatives for cross-border transactions. Traditional methods often involve intermediaries, lengthy settlement periods, and conversion losses, whereas crypto payments enable near-instant transfers with reduced reliance on banking networks. By automating the conversion process and minimizing technical barriers, PayPal’s solution could reshape the retail payment landscape. However, the absence of FDIC or SIPC coverage remains a critical caveat, highlighting the inherent risks of adopting digital assets in commerce [1].

Source: [1] [PayPal Opens 100+ Crypto Payment Options for US Merchants, But PYUSD Hits Regulatory Snag] [https://coinpedia.org/news/paypal-opens-100-crypto-payment-options-for-us-merchants-but-pyusd-hits-regulatory-snag/]