PayPal Drops Out of Libra. Should You Accept Cryptocurrency as Payment?

Last Updated on September 20, 2019

This post was updated on October 11th to include information about eBay, Stripe, Mastercard, and Visa withdrawing from Libra, Facebook’s own unique cryptocurrency, following PayPal’s withdrawal last week.

Breaking: eBay, Stripe, Mastercard, and Visa recently announced that they are withdrawing from Facebook’s cryptocurrency project, Libra.

PayPal, one of the FinTech companies that had pledged to support Facebook’s Libra recently dropped out of the cryptocurrency network. While this launch date should remain on track, it might not launch with the same level of legitimacy as initially planned.


It’s a buzzword with a mysterious and secretive ring. But it’s very real, and becoming a normal payment option for a growing number of businesses.

Big names like Subway, McDonald’s, Microsoft, PayPal and WordPress accept forms of cryptocurrency from their customers. Young consumers are driving the demand for cryptocurrency payments on a wider scale.

Is joining the trend right for your business? Getting set up to accept cryptocurrency isn’t hard, but unstable values and an uncertain regulatory future could present challenges for businesses seeking to benefit from the decentralized structure of the technology.


eBay, Mastercard and Stripe Drop Out of Libra

Following PayPal’s recent withdrawal, eBay, Mastercard and Stripe have all announced that they are withdrawing support from Facebook’s Libra project.

This development—three household-name financial institutions dropping support at once—is a grim sign, especially with privacy and legitimacy concerns surrounding both Facebook and cryptocurrency already.

But it doesn’t seem like they’re out of the running altogether quite yet.

A representative from Stripe clarified the terms of the exit in a comment to TechCrunch, saying that they were open to supporting the project if things changed in the future.

“Stripe is supportive of projects that aim to make online commerce more accessible for people around the world. Libra has this potential. We will follow its progress closely and remain open to working with the Libra Association at a later stage,” the spokesperson said.

While none of these financial brands have provided specific standards or terms regarding future support, they may once again support Libra.

Paypal Drops Out of Libra, Facebook’s Cryptocurrency Network

As Facebook expands its reach and presence as a social media company, they recently announced plans to launch Libra. This unique cryptocurrency is slated to launch next year, and will be used to exchange currency among Facebook’s apps, like Messenger and WhatsApp, as well as others.

PayPal did formally announce this support withdrawal, but they did not specify the reason.

“PayPal has made the decision to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations,” a representative from PayPal said.

Financial regulators and members of Congress alike have vocalized concerns about Facebook’s data mining and invasive model. Facebook’s representatives insisted that the payment system would not leverage any data collected.

What is Cryptocurrency?

As cryptocurrency has grown in popularity, it’s caused quite a bit of confusion too. To know whether it’s a smart choice to offer your customers the option to pay with cryptocurrency, understanding exactly what it is and how it works is crucial.

Cryptocurrency is a virtual or digital currency that can be purchased using real currency – or other cryptocurrencies – and then used in transactions. These “coins” are available on cryptocurrency exchanges or through brokers and are commonly used in peer-to-peer transfers. Although Bitcoin is perhaps the most well-known cryptocurrency, there are actually over 2,200 types with a total value in the hundreds of billions.

Benefits of Accepting Cryptocurrency – And Risks to Consider

Despite the complexity involved, it’s fairly easy to accept cryptocurrency from customers. Reduced cost is one big perk of doing so. Most cryptocurrency payment gateways charge flat fees of 1% or less of each transaction, which can significantly improve cash flow if your customers choose coins over credit cards.

Adopting cryptocurrency as a payment method also:

  • Provides customers with a convenient, fast way to pay
  • Attracts younger demographics, especially millennials and Generation Z
  • Speeds up transaction times
  • Makes it possible for customers without access to traditional banks to make purchases
  • Opens your business up to the global marketplace
  • Eliminates currency exchange fees
  • Increases security
  • Lowers the risk of fraud and data theft
  • Provides protection from chargebacks
  • Puts money in your bank account faster

However, there are potential drawbacks to consider.

Because customers have numerous currencies to choose from, it may not always be possible to cater to everyone’s preferred kind of coin. New currencies, such as Facebook’s Libra, are also appearing on the scene. Libra’s structure and the blockchain on which it relies both differ from that of other cryptocurrencies, which may further complicate the payment landscape.

Cryptocurrency values are notoriously unstable, making it essential to convert what you earn to fiat as quickly as possible to avoid losing money. The lack of backing by any federal entity adds another element of instability to the currency. With constant changes in value, reporting profits from cryptocurrency transactions on your taxes can also be complicated.

Using a third-party payment gateway to handle transactions and store coins could leave the cryptocurrency in your wallet vulnerable to theft or loss. The blockchain isn’t 100% secure, and nothing about this type of currency is regulated as of yet. This puts the responsibility of safeguarding transactions and cryptocurrency earnings on businesses and the providers offering cryptocurrency payment software. It’s also necessary to monitor emerging regulations as world governments try to get a handle on this relatively new payment method.

How to Accept Cryptocurrency as a Business

As of June 2018, somewhere between 2.9 and 5.8 million people around the world were actively using cryptocurrencies. Businesses in the food and travel industries are adopting payment methods at a fast rate, too. Technology companies are getting in on the game, as well, including Microsoft, Dish Network and Newegg.

The good news is, you don’t have to run a huge corporation to start capitalizing on the benefits of accepting cryptocurrency. All you need is a payment gateway capable of processing coins, such as BitPay, CoinPayments, CoinGate or Coinbase Commerce. Using one of these gateways, you can create a digital wallet for your business, integrate cryptocurrency payments into your current POS system or online shopping cart, and receive payment (as fiat) deposited in your business bank account.

What should you look for in a cryptocurrency payment solution? You should be able to accept a wide range of coins and exchange them for fiat as soon as possible to protect your business from the inherent volatility of the currency.

Compare transaction fees to ensure you won’t lose too much of each sale, and make sure the payment gateway is compatible with your current physical or online POS system. If you use a basic or older POS solution, you may need to upgrade in order to start processing cryptocurrency.

Once you’re set up, you can accept cryptocurrency as payment for:

  • In-store transactions
  • eCommerce sales
  • Mobile sales
  • Emailed invoices

Don’t forget to post signs in your store and add badges to your website letting your customers know they have a new payment option available!

How Cryptocurrency Works as a Payment Method

Cryptocurrency transactions are stored in the blockchain, a public “ledger” in which all transaction information is verified and recorded. Unlike banks, the blockchain isn’t centralized or controlled by any one entity or group. Instead, it operates as a decentralized record of transactions where all information except the identity of users involved in transactions is accessible. Transactions are also verified by public consensus to ensure details are legitimate before any exchange of cryptocurrency is finalized.

When a transaction is confirmed as valid, it becomes a “block” in the blockchain and is given a unique code called a hash. Hashes connect new blocks to previous blocks, creating a continuous chain in which hashes create links between each block, making it very difficult for anyone to alter the chain. For this reason, the blockchain is often described as “immutable,” meaning transactions are hard to tamper with once they’ve been recorded.

How does this work in practice? Say a customer wants to pay you using cryptocurrency. Their coins are stored in a cryptocurrency “wallet,” which uses a pair of identifiers called keys, one public and one private, to validate them as the owner of the coins. During the payment step of the purchase, coins are exchanged from their wallet to a wallet you’ve set up for your business. Legitimate transactions are added to the blockchain as part of the record, and you receive your payment. Third-party cryptocurrency payment processors can convert the coins into actual cash, called fiat, which is then transferred to your business bank account.

Online, this all happens in the customer’s shopping cart. At a physical store, your POS system generates a QR code for the transaction amount, which the customer then scans with their smartphone to complete the purchase.

Need Funding to Get Started with Cryptocurrency?

You shouldn’t need to invest in much additional software or infrastructure to start accepting cryptocurrency as a payment method, but if your POS system is outdated, you’ll want a new setup to ensure smooth integration for your brick-and-mortar store and website.

With equipment financing, you get fast access to the technology you need without disrupting your cash flow. You’re free to upgrade to a top-of-the-line POS solution capable of integrating with cryptocurrency payment gateways and your accounting software for quick and easy processing and recording of transactions.

National Business Capital & Services can connect you with the right financing option through a global marketplace of over 75 lending partners. Discuss your options with a Business Financing Advisor, and start bringing your business into the future with new cryptocurrency payment options. 

National Business Capital & Services is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.

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About the Author, Megan Capobianco

Megan is passionate about helping business owners along their journey - providing them with relevant content they can use in their day-to-day operations.

Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advise from National Business Capital & Services and the author. Do no rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely in this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there maybe errors, omissions, or mistakes.