PayPal’s pledge to support cryptocurrency as a funding source for 26 million merchants will likely benefit mass cryptocurrency adoption more than it will boost the payments firm’s bottom line, Morgan Stanley researchers said in a Wednesday report obtained by CoinDesk.
The move “should expand crypto acceptance online, which to date has stalled at 1% of the top 500 internet retailers,” wrote the Morgan Stanley analysts.
“Assuming PayPal is able to scale its crypto trading activity to Square’s current level, it would only add [0.3%] of growth to PayPal’s ~$21.3 billion” revenue base for 2020, they wrote.
The reason: Boosting crypto acceptance doesn’t necessarily mean greater transaction volumes.
Other upsides of supporting crypto include staying competitive with Square and attracting “a new user base” to PayPal, the researchers said.