How to Buy Bitcoin with PayPal in 2024
PayPal remains one of the most popular payment processing companies in the world and for a time was one of the most popular methods of buying bitcoins.
And even now when most bitcoin exchanges no longer process bitcoin purchases through PayPal, there still exist ways through which you can convert your PayPal balance to the legacy digital currency.
In this guide, you’ll find the best ways to buy and trade bitcoin with PayPal.
Leading PayPal to Bitcoin platforms include mainstream regulated exchanges, peer to peer cryptocurrency platforms, and bitcoin lending sites. Reputable bitcoin exchanges continue to process PayPal-to-bitcoin conversions for individuals without access to such other payment processing methods as credit/debit card or bank transfer. So, Why are exchanges shunning bitcoin purchases through PayPal?
PayPal adopts a customer-first mode of operation that one may consider biased towards the customers. It allows for charge-backs (cash refunds) to customers for goods and services rendered by businesses. In a conventional business-environment, goods often have to be returned to the sellers. But in the case of irreversible bitcoin transactions, exchanges would find themselves on the receiving end of a scam trade every time a client asked or a refund on already purchased coins. Rampant cases of PayPal chargebacks and disputes closed in the client’s favor forced most exchanges to quit on the payment service provider.
Why buy bitcoins using PayPal dollars?
- Lack of access to other payment methods:
What happens when your preferred bitcoin exchange service provider doesn’t accept deposits in the form of your country’s currency or direct deposits from your local bank? You can always count on PayPal to help you convert your native currency to acceptable global currencies like USD, EUR, or GBP. This is especially ideal if you consider PayPal’s currency exchange rates that range from 3.5% to 4% cheaper compared to your local bank currency conversion charges.
- Buying from a peer to peer forum:
The bitcoin rush hasn’t just birthed exchange companies, it has also contributed to the mushrooming of numerous peer-to-peer crypto exchanges around the world that match bitcoin buyers and sellers. In most cases, these P2P forums are inclined towards payment systems that guarantee faster processing speeds. They, therefore, won’t accept such payment methods as bank wire transfers or credit card payments whose pay processing takes days. Most will almost always have PayPal as their primary payment method.
- If the bitcoin exchange supports PayPal deposits:
None of the best bitcoin exchanges will release tokens to you before your payments, whether cash or in the form of other cryptocoin, reflects on their end. This means that the faster the money processing company one uses to deposit the funds, the sooner you will have your coins. It also means that you are better off purchasing bitcoins with PayPal if you are looking for speedy access to your coins. This will, however, only be possible if your preferred exchange accepts PayPal deposits.
What are the pros and cons of buying bitcoins using PayPal?
- PayPal provides near-instant cash transfer service
- Highly secure and convenient
- You can always file a dispute and request for a refund (chargeback) if you suspect foul play
- Offers immediate in-app currency conversion services
- PayPal-to-bitcoin transactions are prohibitively expensive with fees as high as 10%
- Most exchanges and P2P firms intentionally delay transaction processing to deter scammers
- Banned by most popular bitcoin exchanges
Criteria used to rank reliable sites that accept bitcoin purchases through PayPal:
- Regulation and reliability
- Transaction processing speeds
- Maximum daily and monthly transaction limits
- Privacy and system security
- Transaction charges
- Ease of use
- Customer support
Leading platforms that offer PayPal to bitcoin exchanges
1. LocalBitcoins – Best for localized transactions
First off, understand that LocalBitcoins is not your typical bitcoin exchange. It is more of a peer-to-peer bitcoin marketplace that was initially meant to help individuals find local bitcoin sellers in their commune and match them up for face-to-face transactions. The sparse number of bitcoin sellers in any one locality willing to send their coins, however, made this theorem impractical.
The speedy transaction processing times for PayPal would, also, step in to ensure that you can still send and receive bitcoins from peers across the world and fund the transaction via PayPal. Unlike the more straightforward bitcoin purchases, LocalBitcoins purchases are rather complicated and a tad expensive. Most sellers will often hike the bitcoin price by as much as 20% with the exchange platform charging an extra 1% fee for every transaction.
How to buy bitcoins using PayPal on local bitcoins:
Step 1: Create an account and search for sellers
You can only transact on LocalBitcoins with a verified trading account. Once logged onto the P2P platform’s website, you will have to click on the buy bitcoin icon that directs you to the search area. Here you will have to key in such details as the number of bitcoins you want to purchase (or the amount in USD you wish to spend), the desired country of the seller, and filter the search to only include sellers that accept PayPal payments.
*Note: LocalBitcoins was meant to link buyers and sellers originating from the same locality and, therefore, doesn’t feature a worldwide search.
Step 2: Verify the seller’s authenticity (very important)
You search result list will list all bitcoin sellers within your selected country, the limit of how much they can transact a day and their selling prices. You will want to click on as much as sellers links as possible and vet their legitimacy before contacting them to initiate the transfer. By clicking on each seller’s name, you are directed to their profile that features such details as to how many successful sales they have made, their terms of trade, such as requiring a selfie and photos of government-issued ID, and how many users have blocked them. The key here is to go with the most affordable seller with the highest number of sales, friendliest terms of trade, and minimal to no blocks by other users.
Step 3: Lock a transaction and initiate PayPal dollar transfers
If satisfied by a seller, their fees and terms of trade, you can lock a transaction and proceed to send them the PayPal funds on the given address and such other documentation as your selfie holding an ID or any of their terms of trade requirements. You will then have to wait for them to confirm the reception of payment and send over the bitcoins.
- Relatively fast compared to most mainstream bitcoin transactions
- High likelihood of scoring a trader from your neighborhood for the more secure face to face transactions
- You can always rely on the user reviews and transaction history to check the authenticity of the trader
- Highly risky and flooded with cases of scammers
- Highly inflated bitcoin prices
2. xCoins – Best for bitcoin lending
xCoins describes itself as a peer-to-peer cryptocurrency lending marketplace where you can gain access to bitcoins using PayPal. Unlike local bitcoins that adopts a direct approach to the sale of bitcoins on their platform, xCoins is rather ambiguous as it claims to offer bitcoins loans to different individuals across the world. But how does this work?
Theoretically, xCoins was designed to be a platform where bitcoin owners can ‘loan’ bitcoins to other cryptocurrency enthusiasts across the world. Getting the ‘loan’, however, demands that you deposit cash that is the equivalent value of the bitcoins you are purchasing plus the transaction processing fees as well as interests due before accessing the digital coins.
The fact that there is no contractual agreement between the lender and the ‘loanee’ or a preset return date effectively qualifies the transaction as a bitcoin sale. Charges here include the inflated bitcoin price, plus the transaction fees, and the ‘interest on the loan.’ Conservative estimates place the average bitcoin transaction cost here at 26% above the market rate.
Here is the process breakdown on how to buy bitcoins using PayPal on xCoins:
Step 1: Register and verify your account
After signing up and verifying your xCoins trading account, the bitcoin lending website will direct you to a page where you get to fill in the loan details.
Step 2: Fill the Bitcoin application form and make the payment
Here, you fill in the number of bitcoins you wish to ‘borrow’ or the amount of PayPal dollars you wish to spend. Upon hitting send, a pop u window appears breaking down the ‘details’ with such section as a security deposit that translates to the actual bitcoin cost, lenders fees, origination fees, and transaction processing fees. You then have to accept the loan agreement after which you are directed to the lender’s PayPal page. Here you are only required to key in your PayPal login details and pay the auto-generated invoice.
- A straightforward bitcoin purchase process
- Beginner friendly user interface
- No hidden fees
- Bitcoins price here is way higher than the global market rates
3. Paxful – Best for escrow services
Paxful is a peer-to-peer exchange platform that allows for the purchase of bitcoins using PayPal balances. The platform features one of the most efficient and straightforward ways of purchasing bitcoins using the all-popular payment processing services provider. Some of its most unique features include an inbuilt escrow account that acts as a safe conduit for the exchange of bitcoins and PayPal funds between sellers and buyers.
The P2P exchange also maintains one of the most simplistic and easy to use user interfaces that make it beginner-friendly. Like in most other peer-to-peer exchanges, bitcoin prices here are inflated significantly above the market rates. Buying bitcoins on Paxful is free as the sellers have to settle the escrow fee.
How to buy bitcoins using PayPal on Paxful
Step 1: Register account and key in details about the bitcoin purchase
Purchasing bitcoins on Paxful starts with registering and verifying your account. You are then directed to a search page where you key in the specifics about your intended purchase. These include how much bitcoin you wish to acquire, your preferred currency, and payment method.
Step 2: Chose a seller from the list provided
The site will then direct you to the results page that lists different bitcoins sellers who match your criteria. Go through their profiles checking such details as the number of successful trades, time spent on the platform, and selling price. You then have to decide on the seller from whom you wish to buy bitcoins from, after which the system will automatically move their coins to an escrow account where neither of you can access the coins.
Step 3: Fund the escrow account
After initiating the transaction, you will have no more than 30 minutes to fund the escrow account. If successful, the transaction will be marked complete and the bitcoins released to your wallet. Should you fail to pay within this time, the system automatically releases the coins back to the seller’s wallet and the marketplace.
- Buyers aren’t subjected to transaction fees and other charges
- Escrow account guarantees the safety of the coins and eliminates cases of scam
- The P2P lender maintains an active dispute resolution center to address any disagreements
- Expensive to buy bitcoins here as sellers pass on escrow fees to buyers in hiked prices
- Not immune to such fraud cases as chargebacks
4. Wirexapp – Best for low-cost transactions
Wirex is an all-around crypto exchange platform that lets you buy and sell bitcoins or even store them securely in their cold storage wallets. The most interesting thing about this is that they don’t impose additional transaction charges on bitcoin purchases and this makes them competitively affordable. You only have to pay a small $1.50 fee per month for card management. It also presents you with one of the most secure ways of purchasing bitcoins securely using your PayPal balance.
However, purchasing bitcoins here isn’t as straightforward as it is when using such other bitcoin exchanges like xCoins. Additionally, buying the coins using PayPal isn’t as direct as payments have to be passed through a linked virtual card. You will also have to wait up to 7 days before making your first bitcoin purchase
How to buy bitcoins using PayPal on Wirexapp:
Step 1: Create an account and request a card
The process of buying bitcoin on Wirexapp starts with registering an account with the payment processor and requesting for a virtual visa card. You can also request for a plastic card to be shipped to you, but this only serves to delay the process.
Step 2: Fund the card ($3) and link it with your PayPal account
After getting the virtual card, you are then required to link (or add) it to your existing PayPal account under the “add another card” section. Before adding it here, it is advisable that you fund with at least $3 from your wirex app as this will be used by PayPal during verification. This can take up to two days.
Step 3: Withdraw PayPal funds to your Wirex card
Given that you cannot deposit funds directly into your wirex account, you will have to fund it by withdrawing from your PayPal balances and into the wirex card. The process is rather straightforward as you only have to click on withdraw on your PayPal account and select the wirex card as the funds destination.
Step 4: Use the wirex card balance to buy bitcoin
You can then log into your wirexapp and buy bitcoins using the funds deposited into the virtual card. The best thing about this is that Bitcoin transactions are free – at market rates with no markups – and you only have to pay the monthly card management fee.
- Totally free bitcoin transaction processing
- Low card management fees
- Straightforward purchases upon linking cards and withdrawing funds
- Complicated card linking and funds withdrawal process
- Withdrawing from PayPal to wirex can take between 5 and 7 business days
The PayPal CEO may have termed bitcoin and cryptocurrency investments as a scam and even listed bitcoin transactions as a breach of policy. Crypto exchanges, on the other hand, may have decried PayPal’s refund policies and even denounced it as a form of payment on their sites en-masse.
But one fact still holds true, they both remain on the list of the most impactful advancements in the future of finance. This explains why bitcoin enthusiasts are always looking for ways to bridge, even when this bridging process carries with it numerous risks and heavy transaction costs.
Can I use PayPal balances to buy bitcoins?No, PayPal doesn’t support bitcoin and other cryptocurrency transactions. Several bitcoin exchanges like Paxful and xCoins have however come up with several workarounds that allow you to buy these coins using PayPal indirectly.
How can I transact with PayPal on popular bitcoin exchanges like Bitcoin?Before January 2019, you were required to use third parties like Virwox, where you would convert PayPal cash into Second Life Lindens (SLL) that you would then use to buy bitcoins on the exchanges. Virwox, however, stopped processing PayPal cash transaction in January making it practically impossible to purchase bitcoins from most exchanges using PayPal funds.
Can I buy bitcoins using PayPal anonymously?No, your PayPal account has all your personal detail including your name, address, and bank details. These can be accessed by virtually anyone who has your PayPal email address.
Why can’t I buy bitcoins using PayPal from online acquaintance cheaply and more conveniently?On the surface, it seems like the most convenient and fastest method of buying bitcoins. But the influx of scammers all over the world has made the process impractical as it is virtually impossible to verify the genuineness of the individuals you met online.
Will the PayPal-to-bitcoin exchange company store my tokens?Yes, reputable bitcoin exchange companies like Wirex will process your PayPal funds and also store them in their highly secure cold bitcoin wallets online.
Edith MuthoniView all posts by Edith Muthoni
Edith is an investment writer, trader, and personal finance coach specializing in investments advice around the fintech niche. Her fields of expertise include stocks, commodities, forex, indices, bonds, and cryptocurrency investments. She holds a Masters degree in Economics with years of experience as a banker-cum-investment analyst. She is currently the chief editor, learnbonds.com where she specializes in spotting investment opportunities in the emerging financial technology scene and coming up with practical strategies for their exploitation. She also helps her clients identify and take advantage of investment opportunities in the disruptive Fintech world.