Fintech giant, PayPal, is apparently in the process of rolling out direct sales of cryptocurrencies.
According to industry sources, its 325 million user base will soon be able to buy and sell crypto directly from PayPal and Venmo, a popular digital wallet payment app with over 40 million users, and that facilitated over $30 billion in payments in the Q1, 2020, owned by PayPal.
As significant as this move will be to the users globally, this also opens up a huge opportunity for Africa considering that PayPal has for a long time looked at the unbanked mobile users in emerging markets as a huge opportunity.
PayPal has already built partnerships with mobile money operators and banks across Africa. Some of these include:
Safaricom Kenya – Subscribers can now transfer money from PayPal to MPESA in a few easy steps
Xoom acquisition – The money transfer service operates in 33 African countries with over 150, 000 withdrawal points in Africa and funds transfer directly to bank accounts including Egypt, Morocco, Nigeria, Rwanda, South Africa, and Uganda
African banks – PayPal has partnered with a number of large African banks to offer its payment services. Some of these banks include:
The PayPal-MPESA partnership is already a big deal in Kenya where online businesses and freelancers are able to make instant money transfers from their PayPal accounts directly into MPESA, and vice versa.
A recent upgrade now means withdrawal requests take just 1 (one) minute between PayPal and M-PESA.
Chege hi, as fast as Paypal releases it onto Mpesa. ^SI
Speaking about PayPal’s vision for Africa, the company CFO has previously said:
“We have a vision to democratizing financial services for those that are undeserved today. With a mobile device, we can put all of that power of a bank branch in the palm of their hand and allow them to join the world of eCommerce and shop online.” ~ John Rainey, CFO, PayPal
According to GSMA, mobile phone usage in Sub-Saharan Africa is expected to reach nearly 700 million by 2025.
Expanding access in Africa would benefit PayPal, as the company would have more people using its services to pay for online purchases. PayPal handles payment transactions for eBay and is seeking contracts to process payments for Amazon sellers.
Peer-to-peer Bitcoin marketplaces like Paxful, enable PayPal transactions and this offers African traders a huge arbitrage opportunity, sometimes as high as 30%, making PayPal payments a much-preferred method.
There is no doubt that enabling direct crypto purchases on PayPal will have a huge impact on the crypto space in Africa. We can only wait and see how this will change or at least alter, the current African crypto ecosystem.
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