PayPal Launches Crypto Payment Tool for U.S. Merchants with 0.99% First-Year Fee

PayPal Holdings Inc. has unveiled a new feature allowing U.S.-based merchants to accept payments in over 100 cryptocurrencies, marking a significant expansion of its digital asset offerings. The tool, branded as “Pay with Crypto,” enables businesses to integrate cryptocurrency payments through major wallets such as MetaMask, Binance, and Coinbase, with transactions automatically converted to PayPal’s stablecoin (PYUSD) or fiat currency before settlement. This development, announced in mid-July 2025, positions PayPal as a pivotal player in mainstream crypto adoption, aiming to reduce barriers for small and medium-sized businesses in cross-border and domestic transactions [2].

The service operates with a 0.99% transaction fee for the first year, decreasing to 1.5% in subsequent years—rates substantially lower than the 1.57% average credit card fees paid by U.S. merchants in 2024, per the Nilson Report [1]. By converting crypto to PYUSD, merchants avoid exposure to price volatility, ensuring predictable revenue streams. Supported assets include major cryptocurrencies like Bitcoin and Ethereum, as well as niche tokens such as TRUMP and Fartcoin, reflecting PayPal’s broad approach to token inclusion [1].

The launch aligns with regulatory developments, notably the recent enactment of the GENIUS Act, which provides a legal framework for integrating stablecoins into financial systems. This legislation has created a more favorable environment for PayPal to expand its PYUSD stablecoin, first introduced in August 2023 as the first major U.S. fintech stablecoin [1]. The move also follows competitive advancements by peers like Stripe, which in October 2024 launched a USD Coin payment option adopted by users in 70 countries within 24 hours [2].

For merchants, the feature offers dual advantages: lower transaction costs and access to a global customer base. Cross-border transactions, often costly and complex for small businesses, become more viable through PayPal’s infrastructure. For example, a merchant in Oklahoma could seamlessly receive payments from a consumer in Guatemala, with PYUSD facilitating stable settlement. Consumers benefit from reduced fees and flexibility in using preferred cryptocurrencies [1].

Industry analysis suggests the initiative underscores broader fintech trends toward crypto integration. PayPal’s established user base and partnerships with centralized and decentralized platforms (e.g., Coinbase, Uniswap) strengthen its competitive edge. However, challenges remain. The inclusion of niche tokens may attract regulatory scrutiny, while the dynamic crypto landscape requires ongoing compliance adjustments. Long-term success hinges on PayPal’s ability to balance innovation with risk management, particularly as adoption rates depend on market confidence and regulatory stability [1].

The rollout excludes New York residents, a decision reflecting ongoing state-level regulatory caution. While PayPal emphasizes its first-mover advantage in U.S. crypto infrastructure, competitors like Coinbase have already built tools for merchants through its 2018 Commerce service. The company’s recent x402 protocol, enabling HTTP-based crypto transactions, further illustrates the sector’s technological evolution [2].

Source: [1] [TheStreet: PayPal Opens Doors for U.S. Merchants to Accept 100 New Assets] [https://www.thestreet.com/crypto/innovation/paypal-opens-doors-for-u-s-merchants-to-accept-100-new-assets]

[2] [Cointelegraph: PayPal Launches Crypto Checkout Tool, Adds Support for 100 Tokens] [https://cointelegraph.com/news/paypal-crypto-checkout-tool-support-100-tokens]

[3] [Fortune: PayPal to Let U.S. Businesses Accept Payment in More Than 100 Cryptocurrencies] [https://fortune.com/crypto/2025/07/28/paypal-100-cryptocurrencies-accept-merchants-bitcoin-ethereum/]