How to Buy Bitcoin with Paypal
When you are ready to begin acquiring Bitcoin — be it to facilitate commercial transactions, long-term investment, short-term trading or any other reason that is your own — there are many ways to settle the transaction for purchasing Bitcoin. PayPal is one of those options.
This guide will help you exercise the option of using PayPal as payment for purchasing Bitcoin. It will help you find platforms and marketplaces that accept PayPal. It will also provide you with some insight as to what it implies over other payment methods.
1. Is It allowed by PayPal?
To some, the answer to that question may come as a surprise. There is a misconception that PayPal cannot be used to purchase cryptocurrency. That is entirely incorrect. As a matter of fact, PayPal has invested resources in causes related to advancing the concept of cryptocurrency and blockchain technology. As a company, they understand that it is the future.
Provided that buyer and seller adhere to the general terms of service established by PayPal for all transactions, the fact that you are purchasing Bitcoin is not an issue.
2. Fees
It should be noted that strictly in monetary terms PayPal may not be the most cost-efficient option used to purchase Bitcoin. That being said, however, there are still many valid reasons why people would want to use it as an option.
These include the trust factor that is involved with a payment system like PayPal. The fact that your personal information and credit card numbers are held by PayPal and do not need to be transmitted to a third-party can be reassuring.
Paying for your Bitcoin with PayPal can also help solve issues related to limitations imposed by individual credit card companies or restrictions imposed by the country where you live. Some countries have strict regulations related to the use of credit cards and wire transfers as payment for cryptocurrency. The fact that you can load your PayPal balance with a credit card and then use that PayPal balance to finalize the purchase of Bitcoin would bypass most of those restrictions and limitations.
Yes, purchasing Bitcoin with PayPal will usually result in slightly higher fees — but for some people, especially under the circumstances described above, it can still be a good choice.
3. Verification Requirements
In terms of the verification that is required when purchasing Bitcoin with PayPal, this will depend on the platform or marketplace that you choose.
Cryptocurrency exchange platforms will usually require you to submit copies of formal identification when you purchase a determined amount of Bitcoin on a daily, weekly or monthly basis. On marketplaces where you deal directly with individual sellers, each seller is usually allowed the option to dictate their own terms regarding buyer verification. Some sellers may ask you to submit proof of identification, others may not. Also, the majority of platforms will require you to have a verified PayPal account.
4. Regional Limitations
For the most part, PayPal has fewer regional acceptance issues compared to wire transfers or credit cards when it comes to buying Bitcoin.
5. Paxful
Paxful is a peer-to-peer marketplace used to bring together buyers and sellers of Bitcoin. Famous for its large number of payment options, it is no surprise to find PayPal being one of them.
Of course, being a peer-to-peer marketplace means that the buyer cannot simply dictate the amount of Bitcoin that they wish to purchase and proceed immediately to finalize the deal.
Would-be buyers must enter the amount of Bitcoin that they are seeking to purchase. They should also select PayPal as the payment option. The Paxful system then displays a list of current sellers willing to sell that specific amount of Bitcoin. The listing will indicate where the seller is located and the conditions that they have for the sale. These conditions can include identification requirements imposed by the individual seller as well as the exchange rate that they want for the Bitcoin.
If there are no sellers at a given moment willing to sell that specific amount of Bitcoin, the would-be buyer can then review a listing of sellers who are willing to sell larger or smaller amounts of Bitcoin with PayPal as payment.
When a buyer spots a seller from whom they wish to buy, they can engage in an online chat with them directly from the Paxful platform to finalize the deal.
Visit Paxful Now6. Virwox
Virwox is an online cryptocurrency exchange platform that accepts PayPal. However, in order to purchase Bitcoin with PayPal users of Virwox must go through a multi-step process.
First, they must register for an account — that should be no surprise. One good thing about Virwox is that they do not require identity verification.
Once your account is set up, you can use PayPal to purchase “Linden Dollars.” If you are unfamiliar as to what a “Linden Dollar” is, you’re probably not familiar with the virtual reality online game known as a “Second Life.” Linden Dollars are the virtual currency that is used when playing the game. This virtual currency has such a demand that there are exchanges, such as Virwox, where it can be traded for fiat currency.
After you purchase Linden Dollars with PayPal you can then exchange those Linden Dollars for Bitcoin. Once you have Bitcoin in your Virwox account, you can withdraw it to your Bitcoin wallet.
Yes, the Virwox method might seem convoluted, but the fact that they have no verification requirements regarding identity documents and the fact that their fee structure is reasonable at 3.5 percent, make Virwox a viable option.
One thing to note is that even if you don’t have to verify your identity to open a Virwox account, the PayPal account that you use to purchase Bitcoin must be a verified PayPal account. In terms of limits, users are capped at $90 per day with an overall $270 monthly cap. These limits can be raised to purchase up to $1,000 worth of Bitcoin per day with a $15,000 monthly cap. These raised limits happen incrementally as your account develops a reputation for good standing.
7. LocalBitcoins
LocalBitcoins is another peer-to-peer marketplace. Similar to Paxful, the buyer is at the mercy of seller availability. Also, being a peer-to-peer marketplace means that each individual seller can set their own conditions regarding their Bitcoin transaction. That means that some sellers may require identification. Also, when it comes to paying for the purchase of Bitcoin the seller can set their own fee structure. While most keep those fees manageable, it is not uncommon to see fees as high as 25%.
Visit LocalBitcoins Now8. UPayCard
Technically speaking, UPayCard is an e-payment wallet. Their customers load their UPayCard account with funds from a variety of sources. They can then use those funds to make online payments or to route them to other accounts. This mechanism is also what allows you to take your traditional currency and come out with Bitcoin on the other end.
UPayCard does not require you to have a verified PayPal account, an unverified account can be used. They do however have rules regarding the verification of identification of the users. This requires you to send digital images of your driver’s license or passport. They may also request a copy of a utility bill as proof of address.
The process to go from PayPal to Bitcoin requires you to first upload funds to your UPayCard account by paying with PayPal. Then you take your fiat currency balance on your UPayCard account and have that converted to Bitcoin. Once your UPayCard balance is in Bitcoin you can request a withdrawal and your Bitcoin would be sent to the Bitcoin address of your choosing.
In terms of fees, when using PayPal they will hover around 4 percent. The exchange rate offered from your traditional currency balance to your Bitcoin balance will fluctuate. Normally, however, you can expect a 2 to 5 percent difference from the prevailing market rates.
An additional fee is assessed if you choose “expedited transfer” to your Bitcoin address. Using the expedited service allows you to receive your Bitcoin in about the time that a Bitcoin block is hashed — give or take 20 minutes. If you do not choose that option, the time that it takes for your Bitcoin to appear in your Bitcoin wallet could take several hours.
9. Conclusion
As you have seen, using PayPal to purchase Bitcoin is possible. While not always the most economical choice to use, the built-in safety features and trust value provided by PayPal make knowing how to buy Bitcoin with PayPal a useful piece of information to have.