How to buy Bitcoin using your PayPal account

So you’ve decided to put your faith in Bitcoin trading and cannot wait to delve into it. Tell you what, this is the best time to invest. 

While the traditional buying methods were only limited to a few options, acquiring Bitcoins has become easier and more convenient today. In fact, one of the major payment processors, PayPal, has started allowing users in the US to trade cryptocurrency via the platform itself. 

But what’s so great about this development?

Well, PayPal reduces the friction of setting up a special account to trade crypto. Moreover, one can get started with as little as $1, which is perfect for beginners. At present, PayPal allows users to buy and sell Bitcoins, but they still can’t withdraw Bitcoins to their external wallets and accounts. You can also use your crypto balance at checkout for select purchases. 

Why use PayPal?

PayPal is a universally accepted payment method that is used by businesses and individuals globally. For users, it means less risk and better protection standards for their crypto assets.  

Despite the volatile nature of Bitcoins, PayPal allowing Bitcoin trading has compelled more users to participate in crypto trading. Ever since PayPal adopted crypto, it’s now been interpreted as a vote of confidence by many skeptical users. 

Particularly novice users with low-risk tolerance will find crypto trading via PayPal the safest and most efficient option. This is mainly because PayPal is a trusted platform and the easiest and friendliest path to crypto ownership. 

Here’s why you should consider buying Bitcoins with PayPal:

• Hassle-free process: It has streamlined the process of Bitcoin trading by making it faster and easy to understand.
• Supports multiple currencies: No matter where you’re located, PayPal supports up to 25 different currencies. This helps you avoid any unnecessary currency conversion fees.
• High security: It offers end-to-end encryption and follows compliance protocols to keep your data safe. The best thing is that it sends email notifications for every transaction in your account.  
• Usage: Bitcoin and PayPal combinedly equal convenience and ease of use. It’s easy to fund your PayPal account from your bank account, which you can directly use to buy Bitcoins or use an exchange platform to buy. 
• Easy accessibility: The easiest way to use PayPal for Bitcoin trading is to access the app, which is available on Android and iOS devices. The mobile app lets you track transactions in real-time and quickly check what your Bitcoin is worth.

Recommended reading: How to sell and buy Bitcoins

Ways to buy Bitcoin using PayPal

PayPal now allows users from the US and UK to trade Bitcoin. It’s been increasingly popular with top crypto brokers and exchange companies. 

Even for those who don’t wish to use PayPal’s crypto service and use it as a payment method, there are plenty of options available for them. 

1. Directly via PayPal

Buying Bitcoins directly via PayPal is as simple as purchasing a product on Amazon. 

1. Create a PayPal account if you haven’t already, or log in to your existing account
2. You’ll see the option to select Crypto in the navigation bar
3. Select Bitcoin from the list of cryptocurrencies you’ll see on the app or website
4. Add your personal information to pass the identity check
5. You’ll be redirected to an SSL secure page where you can select a payment method and complete the purchase

Though transacting Bitcoins via PayPal is a quick and convenient option to trade, it can be a pain for some reasons. 

• As one can’t withdraw Bitcoins, it’s not a feasible option for someone that doesn’t use PayPal as much and doesn’t wish to keep their money in a cold storage
• PayPal’s fees are higher as compared to exchange platforms—there’s an up to 4.5 % fee applicable when you buy Bitcoin from PayPal
• Experienced crypto users are more concerned that they never actually own their crypto directly on PayPal—because they can’t transfer their assets off the platform
• PayPal doesn’t allow to swap currencies from the app and does not allow users to store their assets in a digital wallet 
• PayPal lacks private keys, which means that the crypto owners are more or less holding fiat, and Bitcoins cannot be transferred within PayPal 

Luckily, we have exchange platforms that allow us to buy Bitcoins at a lower conversion fee while using PayPal as the payment method.

2. Payment processor with PayPal 

A platform that allows you to accept or send crypto payments and buy Bitcoin with PayPal or other payment options—every trader’s dream come true.

Such platforms not only securely process your Bitcoin transactions easily but also allow you to set up recurring payments. Moreover, you can buy Bitcoin in fiat currency exchange, and that too in no time. 

How to set up and trade?

To get started, all you need are some basic documents for your identity proof. Sign up using your email id and upload the identity proof, and you’re good to go. Moreover, you’ll need to set up a Bitcoin wallet that you’ll need to store your purchased Bitcoins safely. 

Once you have your account up and running, here are the steps to follow:

• Enter the amount in Bitcoin or fiat currency that you wish to buy
• Enter your Bitcoin wallet address 
• Verify your information
• Select your preferred payment method—supports Apple Pay, credit card, bank transfer, or PayPal

3. Exchange platforms

While a payment processor provides you with a comprehensive list of trading options, you can still go for exchange platforms that simply help you buy and sell crypto. With a crypto exchange platform, you can make the payment using PayPal and store the currency. 

Before exchange platforms came into existence, traders were only able to acquire cryptocurrency through mining or peer-to-peer transactions. Today, with numerous exchange facilities available, traders can securely do crypto transactions. 

How do crypto exchanges work?

In an exchange platform, both buyers and sellers are looking to exchange their assets with one another. The platform matches potential buyers with sellers. 

But first, you need to register on an exchange platform and complete your KYC process. Once your account has been authenticated and is ready to function, you can add funds to the platform via fiat or digital currency and proceed to make purchases. 

Apart from the basic buying and selling options, crypto exchange platforms also provide an abundance of features such as price charts, real-time information, and view options for technical indicators. There are also platforms with automation that execute the buy and sell orders without much human intervention and manual support. 

Types of crypto exchanges

Brokers: These are intermediate parties that regulate transactions between crypto markets and investors who are looking to buy and sell their crypto assets. They get you the best deals and prices, all you do is purchase crypto at prices they set. 

Centralized crypto exchange: This is where a third-party exchange platform oversees that your information is verified and accurate and your KYC is complete. They usually come with an exchange fee and make it easy to buy and sell crypto. 

Decentralized crypto exchange: This method doesn’t have authority overseeing the usage and movement like the previous method. It’s generally open-source and largely based on peer-to-peer trading. 

To know which exchange process you should opt for, consider your financial goals and risk tolerance. Since cryptocurrencies are highly volatile, some have succumbed to hacking and theft. 

Here are some factors you should consider while making the decision:

• Deposit/withdrawal limits: This depends on your level of usage of crypto. Expert traders prefer a higher deposit and withdrawal limit.
• Fees: Of course, you’ll need a platform that covers the basic exchange features at a reasonable price. 
• Payment methods: Not every exchange platform allows you to use PayPal as a payment method. Shortlist the one that allows multiple options.
• Regional restrictions and regulations: Many exchange platforms, including their payment modes, are region-specific. Choose accordingly. 
• Verification requirements: Again, you’re looking to make your life easier, not complicate it more. Look for an exchange platform with a simple and straightforward verification process and a low learning curve.

Own Bitcoin at your convenience 

PayPal has made it easy for users to buy and sell Bitcoins and the easiest way through is the app’s crypto service itself. However, payment processors and exchange platforms are preferred by experienced traders who are looking to conduct transactions at lower rates. 

However, remember there’s no right or wrong approach to Bitcoin trading. Know your options, analyze the pros and cons and choose one that fits your personal preferences. 

Author’s bio

Deepali is an engineer-turned-freelance writer for B2B SaaS, writing actionable long-form content for marketing, Cybersecurity, and HR-Tech companies. When she’s not writing, she’s engrossed in a cozy murder mystery novel with a cup of hot chocolate!

03/10/2022