With over 267 million active users, PayPal remains very popular today. But is it the right way to pay for cryptocurrency? Maybe not. Most people in the cryptocurrency industry would probably tell you not to buy Bitcoin with PayPal since there’s no direct way to do it.
That said, buying Bitcoin with PayPal isn’t impossible. You can make purchases using a third-party service, but it adds fees to your transaction. Furthermore, cryptocurrency transactions through PayPal are prone to scams, so you need to pay more attention to transaction details and whom you’re doing business with.
The issue of non-reversible payments
As you may know by now, transactions you do on the blockchain can’t be cancelled. This means that all transactions involving Bitcoin or any other cryptocurrency are non-reversible. In simple words, once you’ve sold or bought Bitcoin, you won’t be able to change your mind and invalidate your transaction.
This way of operating is incompatible with PayPal, which follows a principle similar to that used by credit cards. Users can refund, depending on the transaction.
So, if you sell a coin and get paid through PayPal, the buyer can ask for a refund. But you can’t cancel the sale. You risk losing both your Bitcoin and the money that should arrive through PayPal – which is the way most scams through PayPal work.
You have no one to complain to because blockchains don’t have a central authority that provides customer support and manages transactions.
Where to buy Bitcoin with PayPal
There’s no doubt that PayPal is a convenient way of paying for almost everything online, excluding digital assets. However, if you don’t have another option at hand and you don’t want to use your credit card, here are some websites where you can buy Bitcoin with PayPal.
This is one of the most popular marketplaces that allows you to buy Bitcoin with PayPal accounts. Note that prices are higher when you use this payment method because traders need to cover the risks of buyers charging back after receiving the Bitcoin.
That’s because the platform can’t protect them against the non-reversible payment issue. At the same time, as a buyer, you are somewhat protected from scams with escrow. When you initiate the trade, the website takes the Bitcoin amount from the seller’s wallet and holds it for the entire time of the deal.
One of the largest trading platforms around, eToro allows you to buy Bitcoin with PayPal, but the purchase comes with a series of limitations. This website is a useful tool if you’re planning to make some money from price speculation.
But you can’t withdraw or send your Bitcoin to other users on eToro. The only way to withdraw profits is by changing them back to fiat currency.
This is another peer-to-peer marketplace that allows you to buy Bitcoin and other cryptocurrencies paying with your PayPal account (or other payment apps). The process is pretty simple, as you only need a photo ID to create your account. However, exchange rates are high, and there’s always the chance of getting scammed.
Many other crypto marketplaces provide support for PayPal users. However, not all platforms are made equal. So, do some research about sellers and buyers before trading with your PayPal account.
PayPal’s complicated relationship with the crypto ecosystem
PayPal and cryptocurrencies have a complicated story. Many start-ups and exchanges have been trying to integrate the payment app into their services without success.
However, it seems as if one of the most popular online payment businesses is having second thoughts about crypto by relaxing its rigid policy for better collaboration. This means we could see more marketplaces and exchanges going back to PayPal to facilitate cryptocurrency purchases in the future.
Coinbase added PayPal withdrawals first for its US customers and then for its EU users to make the exchange more user-friendly. At the same time, PayPal made its first investment in blockchain this spring, by joining a Series A funding round for Cambridge Blockchain.
For now, buying Bitcoin or any other cryptocurrency with PayPal is complicated, lengthy, and prone to scams. But things could change for users as the payment app gets closer to the world of cryptocurrency and blockchain.
Until then, buyers should probably look into safer and easier payment methods. If you want to go with PayPal though, research your partners before trading – and expect to pay extra due to high exchange rates and fees.