Buying Bitcoin with PayPal (Beginner’s Guide)

10 min readJul 12, 2021

In recent years, PayPal has become favorable of Bitcoin. However, it’s still an issue to find credible places to buy bitcoins with PayPal in 2021. This is mainly due to chargeback issues. This post will cover tested methods that will allow you to overcome this issue.

How do I Buy Bitcoin with PayPal

Summary While PayPal now allows users to purchase Bitcoin directly through it, you won’t be able to use your coins outside of its platform. In fact, ever since Virwox shut down its PayPal deposits in January 2020, it got really hard to obtain Bitcoins through a PayPal account.

The two main methods that still allow you to buy Bitcoins with PayPal are eToro (for users who mainly wish to speculate on price and aren’t looking for access to the actual coins) and LocalBitcoins (for those who want to actually withdraw Bitcoins to

If you want a more detailed explanation about each method keep on reading. Here’s what I’ll cover:

1. Buy Bitcoin with PayPal through eToro

Pros: Relatively low fees, a variety of payment methods accepted

Cons: Not available worldwide, withdrawing profits in crypto is complicated

Best Overall Platform to Buy bitcoin with Paypal

The best site for buying bitcoin with paypal is eToro, based on its low fees, regulation and ability to copy successful crypto traders. It’s US friendly and also offers a wallet to store your coins.

First of all, it’s very quick — you can make a transaction within 3 clicks if you have an existing Paypal account. Secondly, it’s only regulated and reputable platforms such as eToro that integrate Paypal.

If anything goes wrong, you can successful file chargebacks through Paypal and these companies will be held accountable. When you buy bitcoin through exchanges and using debit card, you’re at the mercy of unregulated websites and dodgy payment providers. This has been seen in the case of scam products such as Bitcoin Trader and Bitcoin Revolution. For now we will be focusing on trusted platforms.

How to buy Bitcoin with Paypal — step by step

eToro — US friendly

Unlike on exchanges, buying Bitcoin with Paypal on eToro is a very straightforward process which is why we recommend this platform over others.

Step 1: Register an account

Go to the eToro website and register an account by clicking “Sign up.”

You will need to fill out your information on the form that appears and then submit the form to get your account set up.

But you also have the option of signing up using your Google or Facebook account to skip filling the form.

Step 2: Verify Identity

As a regulated platform, eToro requires all users to submit to KYC and AML procedures. For this you will need to upload your ID, driving license or passport.

Though you do not have to do this simply to purchase Bitcoin, you can only sell it on the site if you are verified user.

Step 3: Fund Your eToro Wallet and Buy Bitcoin

eToro supports numerous payment methods including eWallets Neteller, Skrill and PayPal. Select PayPal if that is your preferred payment method and then make your first deposit.

For a beginner, $200 is a good amount to start with as it’s the minimum deposit required you learn how the platform works.

75% of retail investor accounts lose money when trading CFDs with this provider. Cryptoassets are highly volatile unregulated investment products. No EU investor protection.

2. Buy Bitcoin with PayPal through LocalBitcoins

Pros: A wide variety of sellers from around the world

Cons: High fees, chance of getting scammed

One of the most trusted and best ways to Buy Bitcoins with PayPal is LocalBitcoins. We can call it the “Ebay of Bitcoins”.

It just lists the people who have Bitcoin and are willing to sell via different methods. A large number of them sell via Paypal and you can use them.

Even if you’ve to deal with “real humans”, there are a number of security failsafe in place on LocalBitcoins to make sure all your transactions happen seamlessly, and only with legit sellers.

Head over to LocalBitcoins and enter the amount of USD (or any other currency you can pay), select your country, and in the Payment methods select “Paypal”.

Or, you can leave everything blank, and simply just select “Paypal” as the payment method, and you’ll still get a list.
There will be a number of people selling Bitcoins at different prices. Click on the cheapest price.

Now comes the tricky part of verifying the credibility of the seller. So for that, on the next screen click on “See Feedback” next to the seller’s info.

Over there, you can pretty much figure out if the person is trustworthy or not. Check out:

1. “Trade Volume

2. “No. of confirmed Trades” — Make sure the no. of trades is in good proportion with the “No. of partners”. So that the possibility of him trading with just 1 person 1000 times doesn’t give you false impressions.

3. Trusts — The higher this number, the better.

4. Blocks — If he has a higher number of “blocks” than trusts, or even if the “blocks” exceed 100+ people, it’s probably not a good idea. (Although 10–15 blocks are normal if the person has been bitcoins trading for a long time, there might be “misunderstandings” and 10/1000 isn’t a “bad guy” indicator.)

5. Verifications — If the person has his ID/Passport and other crucial details verified, he can probably be trusted. (Even without those verifications you can make deals, it’s just that these verifications can be tracked back to a real person and hence there’s the least chance of a fraud!)

Once you’re sure that the person is legit, has good number of trades with a high number of partners, doesn’t have an alarming no. of blocks, has verified his credentials, you can go forward with the trade.

Once you’ve established trust, just hit the “back” button and specify the amount of Bitcoin you wish to purchase via Paypal. (Make sure you’re already logged in!)

3. Buy Bitcoin with PayPal through xCoins

Pros: Proven method that’s been around for a relatively long time

Cons: Unclear business model and high fees

xCoins.io (not to be confused with xCoins.com) describes itself as a Bitcoin lending service. Instead of selling you Bitcoins they are loaning you Bitcoins (to an extent). Whether this is actually a loan or a sale is somewhat ambiguous and can be left for interpretation. Here’s how it works:

You (the buyer), come to the site and say you want to “loan” some Bitcoins. After a short ID verification process you will be requested to deposit the USD equivalent of how much you want to borrow + credit card / Paypal processing fees + a fixed amount that acts as the interest rate on the loan.

How to Use xCoins Sign up to the site Choose the amount you want to buy Agree to the loan agreement (see image below) Verify your identity Make payment Since this platform matches lenders with buyers, the fees are relatively high.

4. Buy Bitcoin with PayPal through Paxful

Pros: Wide variety of sellers from around the world

Cons: High exchange rate, the chance of getting scammed

Paxful is a P2P site to buy Bitcoin with PayPal. They support over 300 payment options to buy bitcoin. You will be buying BTC from users who have listed to sell their coins on the site. You need to select users selling BTC and accepting payment through PayPal.

Also, sellers accept sales using different payment methods. The most common question among traders is that can I use PayPal to buy Bitcoin? Yes, with a merchant like Paxful you can buy BTC with PayPal at ease. Also, They ensure the safety of buy and sell on the site.

The site acts as a middle man to connect users. They confirm that both parties have made their action correct. Paxful release the coins only after confirmation from both parties.

Paxful is available on both web and mobile. Their UX has had good reviews from many users. They charge 1% fees for trades to the seller.

5. Buy Bitcoin directly through PayPal

Pros: Low risk

Cons: Can’t withdraw coins to external wallet, Only US is currently supported

On October 2020, PayPal rolled out direct purchases of Bitcoin (and three other cryptocurrencies) within the PayPal digital wallet, through a partnership with Paxos.

This allows users to pay PayPal-supported merchants using Bitcoins they bought through the service. However, at the time of writing, users can’t send those coins to other accounts or withdraw them to use them anywhere else.

Also, this option is currently available for US users only, which is another big limitation, but hopefully as time goes buy this service would become more robust.

As for fees, those vary between 1.5% and 2.3%, depending on the size of the purchase.

How to Buy Bitcoin Directly on PayPal

Sign up for an account, if you don’t already use PayPal
Click on “Buy and Sell” under the “Your crypto” section (available only to supported locations)
Click on “Bitcoin” and “Buy”
Enter the amount of Bitcoin you want to buy
Select your payment method and click “Next”
Check the conversion rate and transaction fee

Click ‘Buy now’ to confirm the purchase and the coins should be available in your PayPal digital wallet.

6.Tips on How to Buy Bitcoin with PayPal

Verification

Apply as much account verification, preferably maximum, as possible prior to trying to make purchases. The reasoning for doing this sooner rather than later is because not all exchanges and crypto providers that allow for PayPal integration have the exact same regulatory process. Therefore, you could find yourself continuously entering the same repetitive information over and over when after the whole time you could have taken a bit of time prior, filled out all parameters, and went from there.

Trustworthy

Always check for phishing links. PayPal phishing links are not uncommon at all. Phishing links are fake pages that replicate real PayPal logins and popup asking you for your login tricking the user into thinking they are a verified processor. After entering the details, the window dissolves, and the phishing link takes the login information for the PayPal. To protect against this, always check for security on your popups as well as any cryptocurrency exchanges you’re using that enables PayPal integration. For example, try to find safety indicators such as these if you’re using Chrome. It’s important to consider security during the Bitcoin era.

Do Your Research

Research as much as possible. If you’re unsure if you can buy Bitcoin on an exchange, try to contact an official team member. Do your due diligence as well. Lower-tier and lesser-known sites are more likely to be scams.

7.Bitcoin vs PayPal

Understanding the core differences and similarities between PayPal and Bitcoin are quintessential in extracting their absolute usability. It’s more beneficial to see how they are similar initially, as most users are more accustomed to either Bitcoin or PayPal already and simply want to learn more about the latter.

Similarities

Both Bitcoin and PayPal are payment methods
Both are used as a P2P payment system
Both are used to create fast, less costly transactions online
Bitcoin and PayPal are both technology that aim to streamline the payment process for all users digitally
Both Bitcoin and PayPal enable international transfers and direct integration with online platforms

Differences

Bitcoin itself is a currency, whereas PayPal itself is not a currency or transferrable entity/asset
PayPal works with banks and individuals to process their payments serving almost like a gateway; Bitcoin is decentralised
Bitcoin uses a distributed ledger technology to show validated transactions. PayPal relies on Banks to verify the transactions
Once a payment has been released with Bitcoin, it cannot be cancelled. PayPal has a chargeback feature to cancel payments
Bitcoin uses cryptography and users do not need to be identified. You need to upload your passport/ID, or enter your bank details to open a PayPal account

8. Conclusion — Can I Use Paypal to Buy Bitcoin?

There’s still no easy process that allows you to buy actual Bitcoins (not just for price speculation) with PayPal. My personal suggestion is to use a different payment method if possible. If you have to use PayPal, the methods listed here will work, but get ready for some hefty fees.