EBay’s PayPal unit to start accepting bitcoin payments

EBay Inc.’s PayPal service will start accepting bitcoins, opening up the world’s second-biggest Internet payment network to virtual currency transactions. Tens of thousands of PayPal merchants will be able to accept bitcoins if they choose to do so, according to Bloomberg. Analists said that the move opens the door for PayPal to integrate bitcoin into its main wallet functionality. If that happens millions of retailers will de facto be accepting bitcoin overnight.

“We’re announcing PayPal’s first foray into bitcoin,” Bill Ready, the chief of EBay’s Braintree unit, said at Techcrunch’s Disrupt SF conference yesterday. “Over the coming months we’ll allow our merchants to accept bitcoin. On the consumer side it will be a sleek experience.”

EBay, as the world’s biggest Web marketplace and operator of a global payments service, is the most significant business to date that’s embraced bitcoin. The move could potentially enable PayPal’s 152 million registered accounts to transact using the virtual currency, spurring wider use and acceptance of bitcoin, according to Gil Luria, an analyst at Wedbush Securities Inc.

“PayPal integrating bitcoin into Braintree is a very substantial development,” Luria said. “Not only will it make it possible for some of the fastest-growing apps to integrate bitcoin seamlessly, it opens the door for PayPal to integrate bitcoin into its main wallet functionality.

Braintree provides payment capabilities on websites and in mobile apps such as mobile car-booking service Uber Technologies Inc. and Airbnb Inc., the short-term home rental service for travelers. EBay acquired Braintree for $800 million in cash last year to expand its mobile-transactions business. PayPal and Braintree will work with bitcoin payment-service provider Coinbase Inc. to enable payments in the virtual currency, Ready said.

Ready said that tens of thousands of PayPal merchants using Braintree will be able to accept bitcoins if they choose to do so. “We’re at the right time for this, and to see how to propel it forward,” Ready said. He said he expects to announce which merchants will accept Bitcoin in the coming months.

EBay would join other companies in accepting bitcoin, a digital currency that started to enter the mainstream in 2013. Dell Inc. began accepting bitcoins for for good such as computers in July. Dish Networks Corp., Overstock.com Inc. and Expedia Inc. also accept the virtual currency. In total, about 63,000 businesses handle bitcoins, and users have set up more than 5 million digital wallets to keep their holdings at the end of June, according to CoinDesk, a website tracking the digital money’s use.