A very select group of merchants who use PayPal now have another option when it comes to receiving payments. The digital wallet company will soon offer digital goods sellers the ability to accept bitcoin as payment through its Payments Hub service.
The Wall Street Journal reports that PayPal partnered with bitcoin payment processing firms BitPay, Coinbase and GoCoin to allow merchants selling digital games, music files, eBooks and apps to take the virtual currency as payment.
Additionally, the new arrangement does not mean consumers can use bitcoin as a currency of choice in their PayPal wallets. Instead they will have to stick with other, traditional types of currency.
Officials with PayPal say that by only focusing on a small subset of retailers and consumers they are being cautious in evolving their payment options.
“PayPal has always embraced innovation, but always in ways that make payments safer and more reliable for our customers,” Paypal senior director of corporate strategy Scott Ellison wrote in a company blog post. “That’s why we’re proceeding gradually, supporting Bitcoin in some ways today and holding off on other ways until we see how things develop.”
The WSJ reports that by including GoCoin in the agreement merchants will be able to accept other virtual currencies including Dogecoin.
STILL NOT EXACTLY SURE WHAT BITCOINS ARE OR HOW THEY WORK? CATCH UP WITH CONSUMERIST’S BITCOIN 101
PayPal is just the latest in a string of companies that have begun accepting the use of virtual currency as a payment option. Dish, Overstock.com, Zynga and even NBA team the Sacramento Kings have all begun accepting bitcoin as legal tender for goods.
With the use of the virtual currency growing a number of states and federal regulators have taken steps to ensure consumers are protected. New York State issued a proposal that would setup a regulatory framework around the currency including an anti-money laundering compliance and cybersecurity rules.
The Consumer Financial Protection Bureau issued a consumer warning about the virtual currencies earlier this summer and began accepting consumer complaints regarding the issues.
While some protections for consumers are starting to take shape, that hasn’t stopped a few bad eggs from giving the currency a bad name. Last week, the Securities and Exchange Commission put a stop to a bitcoin-based ponzi scheme, ordering the operator to pay a $40.7 million penalty. And just today a court shutdown a bitcoin mining business for not fulfilling customers’ orders.
PayPal to Allow More Merchants to Accept Bitcoin [The Wall Street Journal]
by Ashlee Kieler via Consumerist
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