A few years ago, the thought of buying Bitcoin or other cryptocurrencies using PayPal was improbable. However, times have changed, and you can buy Bitcoin with PayPal without hassle.
On the 12th of November, 2020, PayPal announced, saying: “We are pleased to announce that all eligible PayPal account holders in the U.S. can now buy, hold and sell cryptocurrency directly with PayPal.” The news followed its announcement in October 2020 that it would introduce options for cryptocurrency buying and selling through a partnership with Paxos Crypto Brokerage.
PayPal is a worldwide recognized platform similar to an online bank where users can send and receive funds locally and internationally. In August 2021, the U.K. became the first country outside of the U.S. that could buy Bitcoin with PayPal.
Before PayPal announced last year that users could buy Cryptocurrency directly on its platform, there were other means by which traders and investors bought Cryptocurrency.
In this article, we will look at how to buy Bitcoin with PayPal directly and how to buy from other exchanges making payments with PayPal funds. Let’s get right into it!
How to Buy Bitcoin on PayPal Platform?
To get started, you will need to have a working PayPal account. If you don’t have one, you can visit paypal.com and sign up using your mailing address and your card details or bank account. Whether you are new to the platform or not, it is pretty easy to navigate. All you have to do is log in through the app or web and press the ‘Crypto’ tab.
There are four coins presently listed on the platform; Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. Select Bitcoin and input the amount you wish to purchase in dollars. Alternatively, you can select a preset amount listed on the platform.
Making a purchase is very easy. The minimum worth of Bitcoin a user can buy on PayPal is $1.00, while the maximum is $100,000 in a week. Like other exchanges, you are required to pay a transaction fee for buying and selling crypto on PayPal. This fee varies depending on how much you buy.
The fee structure is as followed;
- $1 – $24.99 = $0.50
- $25 – $100 = 2.30%
- $100.01 – $200 = 2.00%
- $200.01 – $1,000 = 1.80%
- $1,000.01 and above = 1.50%
Lastly, verify your identity (for new users), fill out a W-9, and agree to the PayPal terms and conditions. Once the purchase is completed, you will see your available crypto balance in U.S. dollars.
However, buying Bitcoin on PayPal is very easy, but it is not without drawbacks. Unlike traditional exchanges that allow you to transfer your crypto to a wallet for safety when you buy Bitcoin through PayPal, you do not have this option. You can only sell and convert the crypto to fiat in your PayPal account.
Also, the transaction fee charged by PayPal is significantly higher than what other exchanges charge per transaction. You can check our Lowest Fee Crypto Exchanges page to know crypto exchanges charge the lowest prices.
To buy Bitcoin with PayPal, an already trusted and regulated platform, is a place to start for new investors. However, as safe and secure as PayPal is, Bitcoin and other cryptocurrencies are still volatile. It is therefore essential to acquire knowledge before investing.
How to Buy Bitcoin with PayPal Funds?
Apart from buying Bitcoin directly from PayPal, there are several other alternatives to explore. If you don’t like the restrictions that come with buying directly on PayPal, we have highlighted four other exchanges that accept PayPal funds.
Coinbase, one of the biggest and easiest to use exchanges. It announced in April 2021 that U.S. customers would be able to buy crypto using cards linked to PayPal. Apart from the U.S., this feature is available in all major European countries, and in the U.K. Coinbase is the only U.S. exchange that supports buying cryptocurrency with PayPal for U.S. citizens.
Coinbase has a beginner-friendly interface that is easy to navigate. For example, to buy Bitcoin with PayPal, log in to Coinbase, select Bitcoin, and add PayPal as a payment option.
However, you should note that Coinbase will not allow users to pay directly from their PayPal balance but rather through debit cards or bank accounts linked to the PayPal account.
There is a daily limit of $25000 for buying crypto via PayPal, and the fee per transaction is a bit costly. For example, for debit card purchases on Coinbase, a 4% fee is deducted for each trade, while bank deposits cost 2.5%of the transaction.
The company WirexApp offers virtual and physical Bitcoin debit cards. This has proven to be one of the best ways of using PayPal money for purchasing Bitcoins at market rates. To get started, you need to create an account with WirexApp, verify it, and you’ll get a free virtual card.
Next, connect this virtual card to your PayPal account, and then withdraw money from PayPal into the debit card. Then, using your PayPal funds, you can purchase Bitcoins and other cryptocurrencies within one to seven days for the first time.
Since Wirex works like any other debit card linked to PayPal, you can use PayPal funds to purchase crypto without any additional fees. Wirex is accepted in lots of countries around the world.
eToro is also a platform that allows you to pay for Bitcoin using PayPal. You could also transfer Cryptocurrency to an eToro wallet. To Buy Bitcoin on eToro using PayPal, log in and select PayPal as the preferred payment method under the “Deposit money” tag. Once all is set, you are free to buy Bitcoin.
However, while buying is seemingly straightforward, withdrawing to your wallet is more complex and time-consuming. eToro charges relatively low, but it is not available in many countries.
LocalBitcoin and Paxful
Both LocalBitcoins.com and Paxful are P2P marketplaces that connect buyers directly with sellers. In addition, the company provides escrow and listing services to sellers. The sellers determine the exchange rates and payment methods they wish to use in this exchange.
PayPal, Payoneer, Skrill, and gift cards are among the payment options available on these platforms. All online sellers do not accept PayPal, but you can filter search results by payment method to find sellers who do. Occasionally, vendors will ask for an I.D. before receiving your PayPal payment.
Note that by using these platforms you will have to pay more as the exchange rates are high. You also risk getting scammed by some vendors.
With PayPal, there are several ways to purchase Bitcoin. It is worth noting that all platforms listed here have been around for quite some time and are in some way reliable. While no method maybe 100% satisfying due to its numerous limitations, some may be more satisfactory than others.
In addition to the platform used for purchases, it is crucial to understand what Cryptocurrency is and its volatility before investing.
Now, which of these methods do you prefer and why? Please leave a comment as I’d like to know your thoughts.
Steve is a cryptocurrency researcher. After completing his master’s degree in economics, he delved into the world of cryptocurrencies. After completing his 5 years of education in London, he worked as an audit specialist in a financial company. He is currently producing exclusive content for coinews.io.