PayPal Launches Crypto Payment Service with 90% Fee Cut to 0.99% and 4% APY via PYUSD

PayPal has launched "Pay with Crypto," a service enabling U.S. merchants to accept payments in over 100 cryptocurrencies, including Bitcoin, Ethereum, and Solana, with instant conversion to stablecoins or fiat currencies. The feature, which began rolling out in late July 2025, reduces transaction fees by 90% to 0.99% compared to traditional crypto payment methods while offering merchants instant settlement and a 4% annualized yield (APY) for converting profits into PayPal’s PYUSD stablecoin [1][2]. By integrating with major crypto wallets such as Coinbase, MetaMask, OKX, and Phantom, the platform streamlines transactions, converting crypto payments to fiat or stablecoins in real time to mitigate exposure to price volatility and reduce technical and regulatory challenges for merchants [3]. The initiative targets a $3+ trillion global cryptocurrency market, leveraging PayPal’s 650 million user base to accelerate mainstream adoption of digital assets [4].

The service’s low fees and instant liquidity could incentivize businesses of all sizes to adopt crypto payments. For example, Shopify-based retailers and national chains can now accept digital assets without requiring customers to convert their crypto first, streamlining the checkout process. This accessibility may drive further consumer demand for crypto as a payment method, particularly among younger demographics familiar with digital wallets. However, success hinges on regulatory clarity and market stability, as crypto remains subject to rapid price swings and evolving compliance requirements [5].

PayPal’s expansion into crypto payments signals a broader shift in corporate attitudes toward digital assets. By framing crypto as a cost-effective, scalable solution, the company aims to attract merchants seeking to reduce cross-border transaction costs and expand into global markets. The integration of PYUSD, PayPal’s stablecoin, further underscores its commitment to blending fiat and digital asset systems. Notably, the U.S. Securities and Exchange Commission (SEC) recently closed its investigation into PYUSD, effectively giving the stablecoin regulatory approval [6]. This milestone positions PYUSD as one of the few stablecoins backed by a major fintech player and aligned with U.S. regulatory expectations, potentially setting a precedent for other financial institutions to follow suit.

The launch of "Pay with Crypto" aligns with PayPal’s vision of "inclusive, borderless commerce," embodied in its PayPal World platform, which unites five major digital wallets. By addressing key barriers to adoption—such as high fees, settlement delays, and volatility—PayPal is positioning itself as a bridge between traditional finance and decentralized ecosystems. While the feature currently targets U.S. merchants, its global expansion could influence payment standards and regulatory frameworks, depending on how governments respond to the growing adoption of crypto in commerce [4][6].

Sources:

[1] [PRNewswire](https://www.prnewswire.com/news-releases/paypal-drives-crypto-payments-into-the-mainstream-reducing-costs-and-expanding-global-commerce-302514424.html)

[2] [Stock Titan](https://www.stocktitan.net/news/PYPL/pay-pal-drives-crypto-payments-into-the-mainstream-reducing-costs-lc9bb46ffmqh.html)

[3] [BanklessTimes](https://www.banklesstimes.com/articles/2025/07/28/paypal-unveils-pay-with-crypto-enabling-merchants-to-accept-100-cryptocurrencies/)

[4] [Mitrade](https://www.mitrade.com/insights/news/live-news/article-3-992086-20250728)

[5] [AInvest](https://www.ainvest.com/news/paypal-crypto-revolution-redefining-global-payments-unlocking-investment-opportunities-2025-2507/)

[6] [Stocktwits](https://stocktwits.com/news-articles/markets/equity/paypal-taps-into-3-trillion-crypto-market-with-new-merchant-payment-option/choeqJ9R5xc)