Bitcoin (BTC) is a pioneering cryptocurrency and is very popular among both retail and institutional investors. It is widely used both as an investment instrument as well as a payment currency. PayPal is one of the most popular third-party payment processing applications and has recently added support for buying/selling Bitcoin and also supports using BTC as a payment option on the app.
While PayPal offers world-class security features and processes transactions quickly, it also charges fees that can be on the higher side. In addition, there might be additional charges levied by the exchange platform. You should carefully evaluate all fees and charges before you select an option.
In this guide, we will discuss how to buy Bitcoin with PayPal directly on the app and also on other platforms.
How to Buy Bitcoin with PayPal directly on the app?
The ability to buy/sell crypto on PayPal is available for selected locations (currently only customers in the US (except Hawaii) can exercise this option).
Sign up on the PayPal site if you don’t have an account. It’s easy and takes under a minute to open an account.
Once you have created an account, head over to the crypto section and select the Buy crypto on PayPal section on PayPal from the dropdown menu as shown below.
At present, you can only buy four cryptocurrencies on PayPal (Bitcoin, Ethereum, Bitcoin Cash, and Litecoin).
Then, select Bitcoin and proceed to the next step.
Then, review your purchase and click on the Buy Now button. The funds will show up under the crypto section in the PayPal app.
However, remember that you are not allowed to withdraw the coins to an external personal wallet and a maximum weekly limit of $100,000 will apply.
will also apply. PayPal also charges extra fees and the crypto transaction costs may range from 1.5%—2.3%.
Users can purchase BTC on PayPal by utilizing their PayPal balance, or a PayPal-linked debit card or bank account. However, a credit card cannot be used currently.
All purchases of cryptocurrency on PayPal are considered final and there is no way to reverse the transaction unless there is some unauthorized activity in which case the user should contact customer support of PayPal.
How to Buy Bitcoin with PayPal through a centralized exchange?
The following exchanges support the purchase of Bitcoin through PayPal. You will need to create an account on the exchange and select PayPal as the purchase option to buy Bitcoin through PayPal.
For buying Bitcoin through PayPal on a centralized exchange such as CoinBase, you will need to first sign up and create an account. If you don’t have an account on CoinBase, head over to the exchange and register one before proceeding to the next steps listed in the guide below. You will also need to verify the account before you are allowed to trade on centralized exchanges. If you wish to avoid KYC and identity verification, you will need to use a peer-to-peer exchange like LocalBitcoins (explained further below).
Once you have an account ready on CoinBase, add PayPal as a payment method as shown below.
That’s all you need to do but remember that the PayPal maximum limit ($25,000 per day) will still apply even when using it as an option to buy Bitcoin through CoinBase. Simply select PayPal as the option while checking out the next time you buy Bitcoin on CoinBase.
It is advisable to use the same email ID on both CoinBase and PayPal to ensure a smoother process. Otherwise, you will need to go through a further 2FA verification process before you can link your PayPal account on CoinBase.
The process is the same for all other centralized exchanges platforms. You will need to register and open an account and then use PayPal as the preferred payment option while purchasing BTC.
How to Buy Bitcoin with PayPal anonymously through a peer-to-peer platform?
It is also possible to use PayPal on a peer-to-peer (P2P) exchange like LocalBitcoins or Paxful to buy BTC instantly. This process is quicker but you will need to be an advanced user in order to successfully exercise this option. Otherwise, there is always the risk of gettings scammed on such P2P platforms. Sign up on the LocalBitcoins platform here.
To buy Bitcoin through LocalBitcoins, head over to the site and select USD and PayPal from the dropdown menu as shown below.
Clicking on the search option will display all proespctive sellers on LocalBitcoins. Select a seller and move to the next step where you can place a trade request and even contact the seller directly. The details of the seller’s account will be visible once the trade is opened.
Accept the terms and make the payment through PayPal to complete the trade.
Paxful is another peer-to-peer platform that you can use to buy/sell BTC through PayPal. It offers PayPal as one of the options. You will need to register an account if you don’t have one already.
Once done, select USD as the payment currency, input the amount, select USD as the preferred currency option, and PayPal as the payment method as shown below.
Click on find offers that will open a new window and will take you to a list of prospective sellers, select a seller and pay through PayPal.
Purchasing Bitcoin through a peer-to-peer platform has the advantage of receiving BTC directly into your personal wallet without the need for storing them on PayPal or a centralized exchange’s wallet. However, the risk of scams on such P2P sites is very high and you should exercise due diligence and use escrow service if available to minimize your risk while trading on such platforms. For users who wish to protect their identity, the peer-to-peer option works best.
PayPal also charges a currency conversion fee that may be as high as 4% above the prevailing exchange rate so that might eat into your transaction costs.
The advantages of using PayPal are the topmost security layers provided by the application and the chargeback feature in case of fraud.
PayPal is panning to slowly roll out the crypto feature in other jurisdictions but that will also depend on the prevailing laws in the country. The company is also exploring options to launch a stablecoin that might further smoothen the process for prospective crypto buyers who wish to use the application for BTC buying/selling.
The PayPal application is widely used throughout the world in many countries and most users prefer to use it because of the chargeback feature. The PayPal app has an easy resolution center where the buyer can ask for a chargeback and the funds are released back in case of detection of fraud.