PayPal Now Accepting Bitcoins; Partners with BitPay, Coinbase and GoCoin

PayPal, the eBay-owned payment facility, announced Tuesday that it will start accepting Bitcoins to allow users more flexible options of payment. The firm has partnered with three major bitcoin currency processors - BitPay, Coinbase and GoCoin in its initial venture.

The service will be available to North American merchants first and if all goes well, the payment mode will be expanded.

PayPal added that the decision of accepting bitcoins through the three processors was the first step towards embracing innovation. However, it asserted that bitcoin has not been added as a currency in PayPal's digital wallet and will only be processed on secure currency platforms for security reasons.

Commenting on why PayPal chose the three specific bitcoin processing platforms, Scott Ellison, senior director of corporate strategy at PayPal wrote in a blog post:

"We chose to work with BitPay, Coinbase and GoCoin because of our commitment to offering innovative and safer ways for businesses to accept payments. All three companies have taken steps to ensure that they know their customers and that those customers are offered certain protections. 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."

"While we're focused on giving people everywhere safer and more seamless buying experiences, we're also fierce advocates of giving businesses -- and in turn their customers -- flexibility and the freedom of choice," Ellison added.

Since its conception in 2009, Bitcoins has had trouble being accepted by the public. Things got rockier for the currency after it was revealed in October 2013 that it was being used for illegal transactions on Silk Road, the online black market.

Earlier, the U.S. Internal Revenue Service said that bitcoin is to be taxed and treated as property and not as a currency. The U.S. Consumer Financial Protection Bureau (CFPB) also announced in August that it will start accepting complaints regarding Bitcoin usage violations and highlighted several dangers linked to using virtual currencies like Bitcoin, Dogecoin and XRP.

"Virtual currencies may have potential benefits but consumers need to be cautious and they need to be asking the right questions," Richard Cordray, the director of the bureau, said in a statement.

"Virtual currencies are not backed by any government or central bank, and at this point, consumers are stepping into the Wild West when they engage in the market," he added.

Currently, one Bitcoin is worth $425.30. It had reached a value of $1151 in December 2013. Check out Bitcoin value in your currency, here.