According to its latest annual regulatory filing, eBay views bitcoin platforms as potential competitors to PayPal.
The company’s 10-K is bland, but the section on PayPal might cause some buzz in the bitcoin community. In the report eBay outlines the scope and operation of PayPal, and it goes on to itemize competitive challenges faced by the service.
Such challengers include: providers of digital wallets, payment card processors, Amazon payments, providers of mobile payment services and card readers for mobile devices, as well as omni-channel POS (point of sale) solutions.
In addition, PayPal faces competition and potential competition for money remitters, bill payment services, issuers of stored value targeted at online payments, providers of online account-based payments, various payment services and digital currencies.
Of course, this does not necessarily mean that eBay views bitcoin as a serious threat or a disruptor, but it’s no longer under the radar.
PayPal is in a different league altogether. It boasts more than a quarter of a billion accounts (including inactive ones) and it supports 26 currencies worldwide.
The value of transactions carried out on PayPal easily dwarfs the market cap of bitcoin on its best day.
In spite of that, it is easy to see why eBay would list digital currencies as potential competitors. PayPal transaction fees are roughly 2%, but they are somewhat lower for high-volume merchants.
The company has taken steps to reduce fees for micropayments, but PayPal defines all transactions of $12 or less as ‘micropayments’. Much smaller transactions (ie less than $1) remain impractical.
Digital currencies can offer affordable microypaments, even under the $1 threshold, which could potentially render them attractive for various content providers.
A recent report from PricewaterhouseCoopers described paywalls as the “logical first choice” for bitcoin deployment and as similar approach could be used for in-app purchases, online gambling and just about any industry that would benefit from cheap micropayments.
Disclaimer: CoinDesk founder Shakil Khan is an investor in BitPay.