PayPal is a well known worldwide payment processor operating in over 200 countries. Most recently, the company decided to make it easier for users to get started with crypto. In this regard, ConsenSys, the company behind MetaMask, announced that it shall incorporate a PayPal integration into its crypto wallet, allowing users to purchase cryptocurrencies with their PayPal account.
PayPal and MetaMask, a match made in heaven?
MetaMask is among the most widely used non-custodial cryptocurrency wallets across the globe. Users can utilize their MetaMask wallets as their authentication method to store crypto assets as well as interact with Web3 products.
However, users are powerless if their MetaMask wallet is empty. As a result, they often use centralized crypto exchanges such as Coinbase and Kraken to purchase crypto and subsequently transfer them to their respective MetaMask wallets.
Moreover, MetaMask also has its own on-ramp features in its mobile app, which eliminates the need to switch to another service and go through numerous intermediate steps. MoonPay, Wyre, and Transak are among the on-ramp partners. If users buy crypto from one of these partners, they will have to go through a KYC process, which means they would have to enter a lot of personal information and provide some form of identification for verification purposes.
What happens now?
The collaboration of MetaMask and PayPal could very well benefit both companies. For MetaMask, the conversion rate with existing on-ramp solutions is likely to be low, mainly because KYC procedures can often be unnecessarily lengthy and intimidating.
Furthermore, there are already over 430 million PayPal accounts globally as per the most recent earnings report. With that in mind, if MetaMask users are indeed able to buy crypto with a PayPal account, it will appear simple and familiar and lead to more activity for the payment processor which would then result in higher revenues for PayPal. For the time being though, MetaMask users would only be able to purchase Ethereum using PayPal. ETH shall be made available to some users in the United States before eventually being rolled out to everyone in the country.
Earlier in the year, PayPal added support for cryptocurrency transfers. PayPal users in the United States can also obtain wallet addresses in order to fund their PayPal accounts with crypto assets. Likewise, PayPal users have the ability to send funds to a third party cryptocurrency wallet if desired.