Digital Wallet Trial by PayPal in Germany Spurred by Stablecoin Advancement
PayPal Enters the Mobile Payment Revolution with New Digital Wallet
PayPal is set to join the ranks of Apple Pay and Google Pay with the launch of its own digital wallet, aiming to combine crypto, Buy Now Pay Later (BNPL), contactless payments, and more. This move aligns with current trends in the payment industry.
PayPal is also venturing into the realm of stablecoins, specifically the PYUSD stablecoin, as part of its strategic push. The company is launching a new mobile wallet in Germany, integrating stablecoin payments seamlessly into existing infrastructure, allowing for quick switches between stablecoins and fiat currencies, and simplifying financial services for Fintechs, SMEs, and payment service providers. PayPal is utilising the Stellar blockchain for this venture, a network known for its reliability in institutional transactions, thereby speeding up and streamlining the use of stablecoins in transactions.
The new wallet offers a unified view of both online and in-store transactions, and will support Pay Later functionality for in-store purchases, allowing German users to pay in 3-24 month installments. PayPal has recently partnered with Coinbase to remove fees for purchases of PYUSD on the exchange, and customers can earn 3.7% interest when they hold the stablecoin (PYUSD) in their PayPal or Venmo accounts.
PayPal's digital wallet will enable tap-to-pay for in-store payments at merchants accepting Mastercard contactless payments. However, it remains unclear if the wallet will include crypto transactions.
The launch of the digital wallet follows PayPal's push for the PYUSD stablecoin. While Apple and Google do not issue their own stablecoins in their digital wallets, they are more established and thoroughly tested in the market, which may make it difficult for PayPal's wallet to gain traction.
In an effort to differentiate its digital wallet, PayPal is offering cashback incentives at select German retailers. The reasons for PayPal choosing Germany to launch its mobile wallet are not specified, but the intention behind this move is to drive adoption of the stablecoin on the Coinbase platform.
As PayPal enters the mobile payment market, it fills a gap in its offerings, as it previously lacked a digital wallet for in-store payments. This move is a significant step forward in PayPal's ongoing mission to innovate and adapt to the ever-evolving payment landscape.
