How to buy cryptocurrency with PayPal

Why don’t more exchanges offer PayPal?

This is mainly due to one simple fact: while PayPal supports chargebacks, bitcoin (and other crypto) transactions are irreversible. As a result, it’s relatively easy for someone to buy bitcoin with PayPal, complain that they never received the BTC they purchased and ask for a chargeback – that way scammers can keep their money and essentially get bitcoin for free.

Because of this heightened risk of fraud, there are only a handful of crypto trading platforms and exchanges that accept PayPal deposits.

Types of platforms you can use

There are a few different options to choose from if you want to use your PayPal account to buy cryptocurrency:

• Peer-to-peer marketplaces. The first option is to buy crypto through a peer-to-peer marketplace, such as LocalBitcoins or Paxful. These exchanges allow buyers and sellers to trade directly with one another, giving the seller the freedom to set their own exchange rate and accepted payment methods. Some sellers accept PayPal, and you can filter your search of available deals on the marketplace by payment method to help find a suitable seller.
• Cryptocurrency exchanges. Most exchanges don’t accept PayPal payments; however, you can use the VirWox platform to exchange fiat currency for SLL (Second Life Linden Dollars), which you can then use to acquire bitcoin.
• Peer-to-peer lending platforms. xCoins is a peer-to-peer lending platform for bitcoin lenders and borrowers. It accepts PayPal as a payment method for people wanting to access a “secured loan” of bitcoin.

Pros and cons of buying crypto with PayPal

4 sites you can use to buy bitcoin with PayPal

Let’s take a closer look at how to buy bitcoin with PayPal on four popular platforms.

• 1. How to buy bitcoin with PayPal on VirWox

  The VirWox virtual currency exchange doesn’t allow you to directly purchase BTC with fiat currency. Instead, you’ll need to use it to acquire SLL first and then exchange those coins for BTC.
  Here’s what you’ll need to do:

  1. Register for a VirWox account and enable multi-factor authentication.
  2. Click the “Deposit” link on the left of screen and scroll down to select “PayPal Express Checkout”.
  3. Select your deposit amount and currency. Please note that VirWox only accepts deposits in USD, EUR, GBP and CHF, so currency conversion fees will apply.
  4. Log in to your PayPal account to complete your deposit.
  5. Go to the “Exchange” section of the menu at the left of screen and select “USD/SLL”.
  6. Choose a market or limit order and enter the amount of SLL you want to buy. Remember to take a moment to review all transaction details before completing your purchase.
  7. Once this transaction has been processed, return to the “Exchange” section of the left-hand menu and select “BTC/SLL”.
  8. Once again, you’ll need to choose either a market or limit order and then enter the amount of BTC you want to buy. Check over the full details of the transaction before buying BTC.

  

  Pros and cons of using VirWox

  Pros

  • One of the world’s oldest digital currency exchanges
  • Relatively easy to use
  • One of the only ways to make deposits into a bitcoin exchange with PayPal

  Cons

  • AUD not accepted so currency conversion fees apply
  • Higher fees for PayPal deposits
  • Low maximum transfer limits
  • Can’t buy BTC directly – need to buy SLL first

  Find out more in our full review of Virwox

• 2. How to buy bitcoin with PayPal on LocalBitcoins

  LocalBitcoins is a peer-to-peer marketplace where you can connect with bitcoin buyers and sellers in your local area, and make the transfer in a way that suits you both.

  To buy bitcoin with PayPal you’ll need to:

  1. Register for a LocalBitcoins account.
  2. You then have two options:

  • Browse existing ads from BTC sellers on the “Quick Buy” screen. Use the drop-down menu provided to select PayPal as your desired payment method, and click “Buy” if you find a suitable ad. You’ll then be able to view the trade details, enter the amount of AUD you want to spend or the amount of BTC you want to buy, and click “Send trade request”.
  • Place your own ad. This allows you to specify your desired payment method, currency and transaction amount. Please note that you’ll need to complete ID verification before you can post an ad for a trade.

  

  Pros and cons of using LocalBitcoins

  Pros

  • You can buy bitcoin with AUD
  • Platform is simple to use
  • Freedom to search for the price you want

  Cons

  • It might take a while to find a seller that accepts PayPal
  • The rate you get depends on the deals available on the platform

  Find out more in our full review of LocalBitcoins

• 3. How to buy bitcoin with PayPal on Paxful

  Paxful is another peer-to-peer bitcoin marketplace that accepts a long list of payment methods, including PayPal. Here’s an example of how to buy BTC using PayPal on Paxful:

  1. Create a Paxful account.
  2. Link your phone number and set your security questions and settings.
  3. Click the “Buy Bitcoin” link at the top of the screen, then select AUD as your currency and enter the amount you want to spend. Choose “PayPal” as your desired payment method and click “Search”.
  4. You’ll be shown a list of open offers that meet your search criteria. Click “Buy” next to one that satisfies all your requirements.
  5. You’ll then be able to view the trade details and enter the amount of AUD you want to spend or the amount of BTC you want to buy. Click “Buy Now” when you’re ready to proceed with your purchase.

  

  Pros and cons of using Paxful

  Pros

  • Simple, quick and easy
  • Potentially one of the most cost-effective ways to buy bitcoin with PayPal
  • Freedom to search for the deal you want

  Cons

  • Might take some time to find a suitable seller
  • The rate you get depends on the deals available on the platform

  Find out more in our full review of Paxful

• 4. How to buy bitcoin with PayPal on xCoins

  xCoins is a bitcoin lending platform where you can use PayPal to acquire a secured bitcoin loan. Instead of buying or selling bitcoin, users offer loans to each other and set an “interest rate”. Sellers “lend” bitcoin, and buyers take this loan and then repay it in a single payment later on.

  This may sound complicated but in practice it’s quite similar to using a more traditional crypto exchange. Here’s what you’ll need to do:

  1. Sign up for an xCoins account.
  2. Enable 2-factor authentication and verify your ID.
  3. Enter the amount of BTC you want to buy and click “Get Bitcoin”.
  4. Take a moment to review the total cost of the transaction and the amount of bitcoin you will receive.
  5. If you’re happy with the terms, accept the loan agreement and click “Continue to Payment”.
  6. You will be redirected to the lender’s PayPal page where you can enter your PayPal account details and finalise payment.

  

  Pros and cons of using xCoins

  Pros

  • Much simpler than it sounds
  • Quick way to acquire BTC

  Cons

  • High fees
  • Low transaction limits for new users
  • Doesn’t accept AUD deposits

  Find out more in our complete review of xCoins

Bottom line

It’s possible to buy cryptocurrency with PayPal, but should you? The high fees involved and shortage of platforms that accept PayPal payments means that there are other more cost-effective and convenient options available.

For example, rather than funding your PayPal account from your credit card and then using that balance to buy crypto, you could use a platform that allows you to buy crypto directly with your credit card.

Having said that, there are several trading platforms that support PayPal if you insist on buying using this method. Compare the features and fees of those platforms to find one that’s right for you.

Compare platforms that accept PayPal

FAQs

• Can I buy bitcoin with PayPal on Coinbase?

  No, Coinbase does not currently accept PayPal transfers. At the time of writing, the only supported payment methods for Australian buyers are credit and debit cards.

• Can I buy bitcoin through PayPal anonymously?

  Not really. While there are some platforms that allow you to buy cryptocurrency without providing any proof of ID, PayPal isn’t an anonymous payment method. This is due to the fact that you’ll need to fund your PayPal account from a linked bank account or credit card, which will in turn be linked to your identity.

• Is it possible to cash out BTC to PayPal?

  Yes. One option is to sell bitcoin through a peer-to-peer marketplace that accepts PayPal, such as LocalBitcoins or Paxful, or place a trade on an exchange like VirWox. Another alternative is to use an exchange where you can sell bitcoin for AUD, then withdraw your dollars to the credit card or bank account linked to your PayPal balance.

• Can I store bitcoin in my PayPal wallet?

  No, you can’t fund your PayPal wallet with bitcoin and BTC cannot be stored in your PayPal wallet. Your BTC will instead need to be held in a dedicated cryptocurrency wallet.

• Are there other ways to buy cryptocurrency with Australian dollars?

  Yes, there are several crypto exchanges that offer fiat-to-crypto trading and accept deposits via bank account transfer, BPAY, POLi Payments, credit card, debit card and even cash.

Disclosure: At the time of writing the author holds ADA, ICX, IOTA, POWR and XLM.