PayPal's 'Pay with Crypto': A Game-Changer for Global E-Commerce

In the global e-commerce market, businesses often navigate a maze of high fees and settlement delays, losing billions each year to the friction of cross-border payments. On July 28, 2025, PayPalannounced a direct challenge to this old model with its Pay with Crypto feature. The move is designed to connect its vast merchant network to the digital asset market, a sector valued at over$3.82 trillion.

This isn't just another payment button at checkout. It's a play to merge digital assets with everyday spending by letting merchants take crypto and get it back as stablecoins or cash, instantly. For a cryptocurrency industry hungry for real-world use cases, PayPal's involvement sends a clear signal about where the market is headed.

Bridging Digital Assets and Mainstream Retail

US merchants using the Pay with Crypto feature can now accept a roster of over 100 different cryptocurrencies, from Bitcoin and Ethereum to Solana and XRP. The service gives them a direct line to more than 650 million crypto users globally, supporting payments from major wallets like MetaMask, Binance, and Exodus.

According to the press release, “PayPal’s Pay with Crypto, connects merchants to a $3+ trillion market, by enabling instant crypto to stablecoin or fiat conversion. Supporting transactions across 100+ cryptocurrencies on crypto exchanges like Binance.com”

The process for customers is simple. A buyer with enough crypto in a linked wallet can select it during PayPal checkout, and PayPal handles the rest. It converts the crypto to US dollars or itsPYUSD stablecoin, settling the transaction on the merchant's end. This setup protects businesses from crypto's notorious price swings by giving them stable funds almost immediately.

The main attraction, however, is the cost. PayPal has set its crypto transaction fee at just 0.99%—a rate it says is up to 90% cheaper than traditional international credit card fees. That pricing, good through July 31, 2026, is a direct argument for cryptocurrency as a better, more efficient way to move money globally.

A Strategic Expansion Built on a Digital Foundation

This launch isn't happening in a vacuum. It's the next step in PayPal's calculated push into digital assets, which started withletting users buy and sell crypto in late 2020 and later allowingtransfers to outside wallets in June 2022. Launching its own regulated stablecoin, PayPal USD (PYUSD), was another key piece of the puzzle.

To drive adoption, PayPal is offering an annual reward ofroughly 4% to users holding PYUSD on its platform. By making PYUSD a core settlement option for its new merchant service, the company is building a powerful feedback loop.

"Businesses of all sizes face incredible pressure when growing globally, from increased costs for accepting international payments to complex integrations. Today, we're removing these barriers and helping every business of every size achieve their goals," said Alex Chriss, President and CEO, PayPal. "Imagine a shopper in Guatemala buying a special gift from a merchant in Oklahoma City. Using PayPal's open platform, the business can accept crypto for payments, increase their profit margins, pay lower transaction fees, get near instant access to proceeds, and grow funds stored as PYUSD at 4%5 when held on PayPal."

Merchants can get paid in PYUSD and immediately start earning yield on their balances, weaving the stablecoin deeper into their financial workflow. It's a clever way to encourage businesses not just to accept PYUSD but to hold and use it, creating a powerful, self-contained economic loop within PayPal's walls.

The strategy feeds into PayPal's larger ambition for a single, unified global payment network. It comes on the heels of the company'sPayPal World announcement, a platform designed to link the world's major digital wallets. Adding cross-border crypto payments moves digital currencies from the fringe to a central role in this interconnected system.

Redefining the Competitive Landscape for Digital Payments

PayPal is stepping into a field where rivals have already put down roots. Stripe, another payments heavyweight, rolled outUSDC stablecoin payments in October 2024, a feature that saw immediate use in 70 countries.

The timing of PayPal's announcement is no coincidence. It follows therecent passage of the Guiding and Empowering Nation's Innovation for US Stablecoins (GENIUS) Act on July 18, 2025. That landmark legislation established the first clear federal rulebook for stablecoins in the US. It mandated 100% liquid reserves and created a formal licensing path for issuers. For companies like PayPal, The GENIUS Act cleared away years of regulatory uncertainty for companies like PayPal. The bill gives them a solid foundation to build new services on top of stablecoins.

The fight to own the future of digital payments is intensifying with the clear rules. Established fintech firms are newly armed with regulatory approval and are pushing aggressively into the space. The industry is making a hard pivot away from speculation and toward real-world utility. Digital currencies are no longer just an asset class—they are being built into the very plumbing of the global economy.

For a company with the sheer scale of PayPal, this is more than just a new feature—it's a normalization event. It effectively tells millions of users and merchants that digital currencies are a legitimate tool for day-to-day commerce. The move puts legacy banks and payment processors on notice; they can no longer afford to view crypto as a fringe curiosity. The lines between the old financial world and the new digital economy are not just blurring; they are being actively erased, one transaction at a time.