Mainstream payment apps are now getting into the cryptocurrency game. PayPal moved to offer Bitcoin and other forms of cryptocurrency to its users in the U.S., making it easy and accessible for anyone with a PayPal account to buy, sell, and hold leading cryptocurrencies (Bitcoin, Etherium, Litecoin, and Bitcoin Cash) via the PayPal platform. Square’s Cash App also launched a cryptocurrency program, possibly boosting Bitcoin value. 

Given PayPal’s predominance in the fintech world, and crypto’s volatile and niche status in the past decade, questions inevitably abound. Will this open the flood gates to wider crypto investment? Will more mobile payment apps get on the crypto train? Are we one step closer to decentralized, unregulated currency?

CivicScience found that in general, cryptocurrency has seen steady growth. Since Q3 of 2019, CivicScience tracking shows that those who invest in cryptocurrency rose 50%–from 6% to 9% of respondents today. Intent to invest has risen as well, more than doubling from 3% to 7%. 

And while the percentage of those who have not invested and aren’t interested has remained the same (66%), more people are now aware of crypto’s existence compared to 2019, when 21% had never heard of it.

Where does PayPal rank amongst the current numbers? A recent survey of more than 3,300 U.S. adults shows that 6% of respondents say they are likely to purchase cryptocurrency through PayPal.

Past experience with cryptocurrency investment appears to dictate interest:

  • Those who have previously invested in cryptocurrency are the most likely to purchase it through PayPal (26%).
  • Those who intend to invest in cryptocurrency show similar but slightly less fervent interest in buying through PayPal compared to investors (25%). 
  • Most who have never invested (including those unaware of cryptocurrency) are unlikely to purchase crypto through PayPal (98%).

Data also show that the younger you are, the more likely you are to be interested in purchasing cryptocurrency through PayPal. That said, 18- to 24-year-olds rank much higher in interest than older age groups.

Given the greater Gen Z appeal, you might expect to see lower income levels when looking at a breakdown of pay scales. It turns out, the opposite is true; those earning $150k or more per year are about three times more likely to be interested in buying crypto through PayPal compared to lower earners. While this makes up a very small percentage, it’s worth noting as it implies that even top middle-income earners may not be as willing to take on the risk of cryptocurrency.

PayPal Leads, but Cash App Has a Crypto Following 

Despite the coronavirus pandemic, adoption of mobile payment apps is not on the up and up. Adoption witnessed a major growth spurt between 2018 and 2019, but has since leveled off at 51%.

However, PayPal ranks as the most popular mobile payment app, compared to Cash App, Venmo (a PayPal subsidiary), Apple Pay, Google Pay, and Zelle. Close to one-half of respondents have used PayPal, compared to just 8% for Cash App.

In general, mobile app users are more likely to invest in cryptocurrency than non-users, albeit not equally. Interestingly, 31% of Cash App users have invested in crypto, versus 12% of PayPal users, indicating that the less popular Cash App could have some degree of unique attraction to crypto investors.

Banks Are Where the Trust Is

Even though investing in cryptocurrency has inched upwards, mainstream adoption seems to be a long ways off, let alone use of the unregulated digital currency as an actual form of payment.

First, among investors, those who say they plan to invest more this year nearly equals those who say they plan to invest less; most plan to invest the same.

Plus, trust in fintech payment tools remains low in the U.S. The majority (91%) of people say they trust banks significantly more than newer digital payment solutions. That makes cryptocurrency a hard sell on mobile payment platforms.

Citizen Night Trading – Hot or Not?

On the topic of decentralized – what has been labeled ‘democratizing’ fintech – CivicScience looked at Robinhood’s use and whether or not it shifted as a result of the recent GameStop saga. A Reddit subgroup used the Robinhood investment app to blow up GameStop share prices overnight, leading Robinhood to place limitations on the app usage.

The survey shows that 10% of respondents have used Robinhood. Tracking shows a steadily climbing increase in awareness, but no change yet in adoption over the past year. 

Fintech and the Future

While interest in using PayPal as a cryptocurrency investment tool is currently low and seems to mostly appeal to those interested in speculative investing (previous crypto investors with cash to burn), the technology is still fresh. PayPal and other mobile payment apps will undoubtedly bring more awareness to Bitcoin and crypto. CivicScience will be watching to see if user habits change, as well as the adoption of other investment tools, such as Robinhood.