PayPal is one of the leading payment platforms. The firm enabled merchants to accept cryptocurrencies through Papal. But the one problem which the firm is facing with cryptocurrency is “volatility”.
PayPal CFO John Rainey told CNBC, that the issue is volatility of the cryptocurrency. The merchants feared the price fluctuations of the cryptocurrency and it might affect their business. Rainey Explained, if a merchant has 10 % profit on a product and he accepts cryptocurrency. And the next day if cryptocurrency moves 15% down then its a loss for the merchant.
“If you’re a merchant and you have, let’s say, a 10 percent margin on a product that you sell and you accept bitcoin, for example, and the very next day it moves 15 percent, you’re now underwater on that transaction,” Rainey said in a interview with “Mad Money” host Jim Cramer.
The beginning of the year 2018 was has been bad for bitcoin and ethereum. Bitcoin has lost over $119 billion in the last three months. Due to the volatility, the merchants are moving towards a stable currency. No merchant wants to be in a loss by accepting cryptocurrency.
“You could have something that appeals to consumers, but if merchants don’t accept it, it’s of little value,” Rainey said.
The only way this can work is if some stable currency is going to come in the future. But right now there is no much interest among the merchants in cryptocurrency. In coming future, if Paypal will come up with a technology with cryptocurrency where merchants get their reasonable profit. Then this would be helpful for the merchants and can increase the use of cryptocurrency.
Let us know what you think of the crypto volatility in the comments below.
