PayPal's making moves to respond to the maturation of virtual currencies, entering into agreements with Bitcoin payment processors BitPay, Coinbase and GoGoin.
These partnerships allow merchants that sell digital goods to accept Bitcoin for payments via integration with the PayPal Payments Hub, the eBay subsidiary's alternative payment platform for digital goods.
"Bitcoin has been big news this year, and for good reason. Although crypto-currencies have been around for some time, only Bitcoin has achieved significant scale. This new entrant in the world of payments has people asking lots of questions including how and if PayPal will decide to work with Bitcoin," said Scott Ellison, the senior director of corporate strategy for PayPal, in an announcement on PayPal's website.
The service is initially available in North America. Coinbase and BitPay are both actively signing up merchants to accept virtual currency payments.
The three processors have taken steps to ensure that they know their customers and that those customers are offered certain protections, Ellison said. "We believe digital-goods merchants will be excited to work with these industry-leading companies to sell ringtones, games and music and get paid with Bitcoin."
The announcement does not mean that PayPal has added Bitcoin as a currency in PayPal's digital wallet or that Bitcoin payments will be processed on its payments platform, Ellison said, adding PayPal has also decided not to work with merchants that pre-sell products.
"PayPal has always embraced innovation, but always in ways that make payments safer and more reliable for our customers. Our approach to Bitcoin is no different. That's why we're proceeding gradually, supporting Bitcoin in some ways today and holding off on other ways until we see how things develop," he said.
The integration follows an earlier move to add Bitcoin acceptance to Braintree, a PayPal payments technology subsidiary that also has a partnership with Coinbase.