The news: PayPal completed its first B2B payment using its proprietary PYUSD stablecoin, paying an EY invoice last month.
The payment was completed using SAP’s digital currency hub.
How we got here: PayPal launched PYUSD last year in partnership with Paxos.
It tried to encourage a number of consumer uses—from P2P payments on Venmo to remittances on PayPal-owned Xoom—but adoption has been slow.
PayPal has not released any of its own data on PYUSD use.
Why make the strategic shift: With unimpressive consumer adoption, it’s no surprise that PayPal has shifted toward identifying B2B use cases for PYUSD.
Potential sacrifice bunt: Prioritizing B2B use cases for PYUSD could come at the risk of hurting other lines of PayPal’s business.
If relying on partners like SAP becomes standard for facilitating PYUSD payments between businesses, PayPal could score stablecoin volume and adoption at the expense of its own B2B payments solution.
Our take: PayPal has taken big steps to prove PYUSD’s B2B bona fides, from using it for investments to paying other firms for services rendered. But all of these announcements have a worrisome common denominator—PayPal.
First Published on Oct 4, 2024