Can You Buy Bitcoin With PayPal?
Posted: Jul 02, 2020
Purchasing bitcoins has become a most searched topic in the last few months as people and investors alike have woken up to the utility of bitcoins as a medium of exchange and as a store of value. Bitcoins have been around since 2008-09 but due to a lack of awareness the masses still do not know how to purchase bitcoins.
Purchasing bitcoins is very easy if you have got all the pre requisites in place, in fact it can be easier than ordering from Amazon because you can get instant transfer of bitcoins as soon as your transaction goes through.
Pre-Requirements For Purchasing Bitcoin
The only thing that people need to fulfill are the pre requisites of purchasing bitcoins, once these pre requisites are fulfilled buying bitcoins becomes a very easy task. Bitcoins can be purchased through different channels and methods of payment that include
- Credit or Debit cards
- Bank transfer
PayPal and cards are the fastest and most convenient ways to purchase bitcoins. If you use these channels then you can get bitcoins in your bitcoin wallet within moments of completing the transaction. This speed and convenience however comes with a cost. Cards carry a high cost of transaction, the cost isn`t very high but it is higher compared to other methods of payment.
The issue with PayPal is that not a lot of bitcoin exchanges or peer to peer platforms offer PayPal as a payment option. So even though PayPal offers speed and convenience but with PayPal it is difficult to look or trusted sites where you can buy PayPal from. The reason why bitcoin exchanges and P2P platforms do not support PayPal is because of the charge back issue.
What Is The PayPal Chargeback Issue?
The charge back issue as defined by PayPal is a method of consumer protection offered by credit card companies to users who purchase goods and services through PayPal. Basically this means that if a buyer purchases an item online and the seller fails to deliver it or sends the wrong item then the buyer can claim a charge back on the credit card, which means that the item can be returned and the buyer can be reimbursed for the amount they paid.
Now this is all fine from a commercial sense, seller fraud is common when it comes to online purchases and this is a good way to protect the buyer from fraud and protect the reputation of a site like PayPal and credit card companies.
However, the issue arises when we add bitcoins or cryptocurrencies to the equation. Bitcoins are issued on the blockchain platform and this means that they do not exist within the conventional financial system. The transactions of bitcoins are not verified by the bank instead they are verified by thousands of different nodes or mining computers that form the distributed ledger of blockchain.
This means that when you purchase bitcoins through PayPal, you pay the amount to the bitcoin exchange for example and when it receives the amount, the exchange sends bitcoins into your bitcoin wallet. Not this seems simple but these are actually two different transactions.
The first transaction happens in the conventional banking system when you transfer your money through PayPal to the bitcoin exchange, this is a simple transfer from one account to another and there is no problem with it.
The second transaction happens when the bitcoin exchange sends the bitcoins into your bitcoin wallet. Now this transaction happens outside the conventional financial system, this happens on the blockchain platform and one of the features of blockchain is that once a transaction is executed, it cannot be traced back and it cannot be reversed.
Suppose you purchase a book through PayPal. You pay for the book and a few days later the book arrives at your door step. Now if the seller has sent the wrong book then you can contact the seller and PayPal, if the seller agrees to return it and send the correct book, then that`s no problem but if the seller disagrees then you can go for dispute resolution with PayPal and claim a chargeback, to get the amount that you spent.
PayPal can easily trace the transaction and check whether you have been sent the right book or not however the problem with bitcoins is that they cannot be traced. Now this is not bad for the buyer, the problem here is for the seller because if any buyer initiates a dispute then the seller will have no way to prove that he has delivered his end of the transaction.
What PayPal Has Done To Remedy The Chargeback Problem
Some buyers have taken advantage of this flaw to claim chargebacks and sellers have been left with no choice but to reimburse them. Due to these fraudulent events bitcoin exchanges have been reluctant to accept PayPal as a method of payment. It is rumored that PayPal is working on a cryptocurrency buying and selling service for its platform.
Coinbase at present only offers PayPal for bitcoin sellers, not for buyers. Binance which is also a very big exchange doesn`t offer PayPal yet. eToro is a bitcoin trading platform, not a bitcoin exchange and it offers PayPal as a payment option. Apart from this LocalBitcoins and Paxful are P2P platforms that allow users to use PayPal as a payment option but users will have to be careful because fraud of P2P platforms can be an issue.
You can read more about cryptocurrency exchanges that have PayPal integrated as a payment method in this piece put together by our friends over at Smart Bitcoin Investments titled, "5 Ways To Buy Bitcoin With PayPal Instantly".
To conclude this article, it can be said that yes you can buy bitcoins through PayPal but you will need to search for trustworthy and reliable exchanges or sellers, if you can do this then yes PayPal can be a very convenient option.
Petar Bekarovski is a web enthusiast and ingenious blogger living in a world of Seo for more than 8 years. He loves all things having to do with Seo including ON page & Off page optimization believing