In a major move to bolster Bitcoin, EBay on Monday (Sept. 8) officially announced its much-teased decision to start accepting Bitcoins.
“We’re announcing PayPal’s first foray into bitcoin,” said Bill Ready, the chief of EBay’s Braintree unit, according to a Bloomberg story. “Over the coming months we’ll allow our merchants to accept bitcoin. On the consumer side it will be a sleek experience.”
To be precise, EBay officially said that it would accept Bitcoin, but it didn’t precisely say when. Forbes quoted Ready as saying that his unit would start accepting Bitcoins in the “coming months.”
Forbes also quoted Ready discussing the decision’s delay. “The reason why we were watching it up to this point is that a lot of things needed to be solved in order for us to have a leading use case. There were regulatory questions and questions over whether it would be easy for merchants and consumers to use.”
Forbes also said that Ready stressed that EBay “was not investing in Coinbase and that it was only partnering with the the San Francisco-based Bitcoin startup.”
Although the move is especially significant for Bitcoin, EBay’s actions will, by extension, give all digital payments a credibility boost. “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,” Bloomberg reported. It quoted Wedbush Securities analyst Gil Luria saying: “PayPal integrating bitcoin into Braintree is a very substantial development. 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. If that happens, millions of retailers will de facto be accepting bitcoin overnight.”
Also, because Braintree’s payments services support services including transportation app Uber, household errand outsourcing app TaskRabbit and home rental service Airbnb, those services will now also be able to accept Bitcoin, assuming they choose to do so.
Will this move be enough, though, to convince the payments community to get comfortable with Bitcoin? Bloomberg wasn’t sure. “A Bloomberg Global Poll of financial professionals in July indicated that there’s still skepticism of the virtual currency even as technology entrepreneurs, venture capitalists and hedge funds plow money and effort into building it into a global payment system. Bitcoin prices have swung between more than $900 to as low as $341 this year as enthusiasts try to address the digital currency’s weaknesses, persuade consumers to embrace it and overcome governments’ concerns that it could be misused by criminals.”
The Wall Street Journal said that the EBay unit has already decided how it will process Bitcoins. “Braintree plans to accept the payments through Coinbase, one of several bitcoin exchanges. Coinbase, based in San Francisco, also provides back-end service for Overstock.com,” the Journal reported. “Coinbase takes roughly 1 percent of each transaction on partners’ sites, though Braintree would likely get a volume discount, said Coinbase CEO Brian Armstrong in an interview today. The value of a given transaction is based on bitcoin’s price at that moment, he said.”