Will PayPal online casinos remain popular in 2021?

Although 2020 has been a markedly rocky year for digital and online payment providers – thanks in no small part to the economic conditions brought about by the global pandemic – PayPal has managed to buck the trend somewhat.

In fact, all things considered, PayPal has had a relatively encouraging year in terms of investor and shareholder confidence in PayPal Holdings, with NASDAQ:PYPL experiencing positive growth trends throughout.

It thus seems that despite the existence of a wide range of options for digital payments, PayPal as one of the oldest digital payment processors has managed to keep pace with the rest of the pack. But can PayPal carry this momentum going forward into 2021? And what changes lie on the horizon?

What went right for PayPal in 2020?

Although 2020 was an incredibly volatile year for so many companies affected by the uncertainty surrounding the pandemic, there were nevertheless a few key industries that manage to resist the downturn.

PayPal was one such company, and revenue growth in two key areas contributed to a bumper year for NASDAQ:PYPL stock. One of these areas was ecommerce. As we all know, one of the main side-effects of the pandemic was that most of our shopping activities were forced online for the foreseeable future. With PayPal so well established as a payment provider in this space, its total volume of transactions increased significantly. Another area of growth was in the online casino space, where PayPal is equally well represented as a payment processor. Once again, the onset of the pandemic saw individuals spending more time than ever at home, with the result that we found ourselves online for extended periods. One popular destination is online casinos, with digital casinos reporting record growth over the last year – both in terms of total revenue and user sign-ups. Consequently, PayPal saw a marked increase in transactions from this sector.

But beyond the reasons for PayPal’s growth in 2020 – a year we couldn’t wait to see the back of – what does the outlook look like moving forward into 2021? And how might this impact the casino industry?

Bitcoin and cryptocurrencies: a threat to PayPal?

If you have been following the news lately, it would be hard to have missed the fact that Bitcoin, and cryptocurrencies more generally, have been hitting new highs. This uptick in the markets has once again shone a light on the utility of cryptocurrencies.

Although many online casinos have supported cryptocurrencies for a number of years, the jury is still out as to how useful and popular they are. In fact, despite cryptocurrency support becoming more commonplace in recent years and months – thanks in part to the security offered when making transactions – relatively few payments are made using cryptocurrencies such as Bitcoin.

It seems that while cryptocurrencies were at one point in the recent past predicted as the great challenger to PayPal and other similar online e-wallet and payment solutions, their positions have not been meaningfully altered. In fact, based on the revenue and profit figures released by PayPal this year, the number of individual transactions PayPal is processing has increased significantly. It appears that although cryptocurrencies have the technological capacity to overtake PayPal in terms of efficiency and transaction speed, their uptake among individual users lags behind the rate at which the technology is developing.

In terms of why this might be the case, there are several factors at play. The first is simply due to how new cryptocurrencies are as a technology. Because of this, there is a general lack of awareness about how cryptocurrencies can be used to make payments online. A second important factor relates to the kind of investment that individual users see cryptocurrencies as. Given that cryptos are still in the early stages of adoption, the majority of users are holding cryptocurrencies with a view towards cashing them out as an investment later on. This means that there is a general unwillingness to part with cryptocurrency in case it is worth more in the future. As such, we tend to see a preference for traditional payment methods such as visa and debit cards, as well as e-wallet solutions such as PayPal.

With all that said, although PayPal’s position looks quite solid at the moment, there are a number of challengers on the horizon. Whether they mount their attack in 2021 or later on, however, remains to be seen. Regardless of who wins in the payments battle between PayPal and cryptocurrencies, the online gambling space looks set to continue to grow into 2021, based on the month-on-month growth experienced in 2020.

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Will PayPal online casinos remain popular in 2021? was first seen on Casino Life Magazine