PayPal Launches Crypto Payments for U.S. Merchants Cuts Cross-Border Fees by 90%

PayPal has introduced a new feature allowing U.S. businesses to accept over 100 cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), XRP, and Solana (SOL), to facilitate cross-border transactions at significantly reduced costs. The service, named “Pay with Crypto,” will convert incoming crypto payments into PayPal’s PYUSD stablecoin or U.S. dollars via partnerships with major crypto wallets such as Coinbase, MetaMask, and Binance. This process enables merchants to settle transactions instantly while avoiding the high fees and delays associated with traditional international payment systems. The feature is set to launch in the coming weeks and is expected to cut cross-border transaction fees by up to 90% compared to credit card processing [1].

The initiative addresses two critical pain points for global commerce: elevated fees for international transactions and the complexity of integrating diverse payment systems. For instance, a merchant in Oklahoma City could now receive crypto payments from a customer in Guatemala, with funds converted to fiat or stablecoins within seconds. PayPal CEO Alex Chriss highlighted that the platform aims to alleviate financial pressures for businesses expanding internationally, particularly those constrained by costly international payment systems. He emphasized that the service allows businesses to “reach a global audience more easily and affordably” while offering additional benefits, such as the ability to earn interest on funds held as PYUSD [2].

PayPal’s fee structure for the service starts at 0.99% in the first year, increasing to 1.5% thereafter. The company argues this is far below typical credit card processing fees, which often range between 2-3%. The feature supports major cryptocurrencies like BNB and USDC, as well as stablecoins such as USDT and USDC, further broadening accessibility for merchants. This marks a significant expansion from PayPal’s 2020 launch of crypto services for individual users, which initially limited the ability to transfer funds to external wallets. The introduction of PYUSD in 2023 has also bolstered PayPal’s crypto ecosystem, with the stablecoin now ranking as the 12th largest by market value, exceeding $894 million [3].

The move positions PayPal to compete more aggressively in the digital asset space, particularly against platforms like Stripe and Square, which have explored crypto integrations but not at this scale. By leveraging its existing global payment infrastructure and user base, PayPal could accelerate crypto adoption in e-commerce, especially in markets where traditional banking systems are less developed. The service’s emphasis on instant settlement and low fees aligns with trends in decentralized finance (DeFi), though regulatory challenges remain a potential obstacle.

Analysis of the initiative suggests that PayPal’s focus on reducing cross-border costs could attract small and medium-sized enterprises (SMEs) with thin profit margins, for whom high transaction fees have historically been a barrier to international trade. The integration of familiar crypto wallets and automatic conversion tools also lowers the technical barrier for merchants unfamiliar with blockchain technology. However, the success of the service will depend on rapid merchant adoption and whether the promised cost savings materialize in real-world transactions. PayPal’s ability to maintain regulatory compliance while scaling the feature will be critical to its long-term viability.

Sources:

[1] PayPal. (2025, July 28). PayPal Drives Crypto Payments into the Mainstream. https://newsroom.paypal-corp.com/2025-07-28-PayPal-Drives-Crypto-Payments-into-the-Mainstream,-Reducing-Costs-and-Expanding-Global-Commerce

[2] The Daily Hodl. (2025, July 28). PayPal Launches 'Pay With Crypto' Feature for Businesses. https://dailyhodl.com/2025/07/28/paypal-launches-pay-with-crypto-feature-for-businesses-in-push-to-reduce-transaction-costs-by-90/

[3] DailyCoin. (2025, July 26). PayPal Opens Crypto Payments to U.S. Merchants. https://dailycoin.com/paypal-opens-crypto-payments-to-u-s-merchants/